Lewis Group recorded higher revenue for the nine months to the end of December, supported by strong growth in credit-based transactions despite continued pressure on discretionary consumer spending. The furniture and household goods retailer, which operates 779 outlets across southern Africa, said total revenue rose by 11.1% over the period.
The performance was driven largely by expansion in the group’s credit book, which lifted so-called other revenue streams, including interest income, ancillary services and insurance-related earnings. These categories increased by 16.2% over the nine months and by 15.2% in the third quarter alone, reflecting sustained demand for store credit as households sought to smooth spending amid rising living costs.
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Merchandise sales grew by 7.1% for the nine-month period, with credit sales advancing by 9.1% and accounting for 69.4% of total turnover. Cash sales increased by a more modest 2.8%, highlighting the extent to which consumers are relying on credit to fund big-ticket purchases such as furniture and appliances. Analysts note that this pattern mirrors broader retail trends in South Africa, where high interest rates and weak real income growth have constrained cash spending while supporting instalment-based retail models, as reported by Bloomberg.
In the third quarter, merchandise sales rose by 7.8%, supported by strong Black Friday trading across all brands. This followed growth of 8.9% in the first quarter and 4.6% in the second quarter, indicating relatively steady momentum through the financial year. Comparable store sales increased by 4.3% over the nine months and by 4.9% in the third quarter, suggesting that growth was not solely driven by new outlets.
The group’s collection rate remained stable at 78.3% for the nine months, in line with the rate reported at the half-year stage in September. However, debtor-related costs rose by 14.8% over the period and by 16.9% in the third quarter, reflecting both the expansion of the debtors’ book and growing financial strain on consumers. Rising arrears are consistent with broader indicators of household stress, with official data showing elevated levels of unsecured credit use and subdued consumption growth, according to Statistics South Africa.
Lewis Group’s results underscore the resilience of credit-led retail models in a weak macroeconomic environment, but they also point to rising risk in the customer base as repayment pressure builds. The company is scheduled to release its full-year results on 28 May, which will provide further insight into how higher debtor costs and interest income are balancing against merchandise sales growth in a prolonged period of subdued consumer confidence.