Unrest cripples one in 10 stores in Shoprite stable as SA counts costs
SA’s largest food retailer Shoprite said about a 10th of its SA stores were affected by the violence and looting that gripped the country last week, but the majority of stores that closed as a precaution have since reopened.
Losses are not expected to be material, with the retailer saying it has insurance, while strong nationwide demand last week meant group sales actually rose.
Of the 1,189 supermarkets trading under the Shoprite, Usave, Checkers and Checkers Hyper banners, 119 stores have been severely affected as a result of looting and/or fire damage, Shoprite said in an update.
Looting also hit 54 of the group’s 537-store RSA LiquorShop business, which is unable to trade at present due to Covid-19 restrictions, as well as 35 of its 240 SA furniture stores.
Shoprite said Transpharm, its wholesale pharmaceutical business, did not experience any disruption in Gauteng or KwaZulu-Natal.
The unprecedented violence has dealt a blow to SA’s efforts to raise its status as an investment destination.
The looting raised concerns of food and medicine shortages as supply chains were disrupted, prompting many consumers to stock up last week.
Shoprite’s peers have also been hit, with Massmart reporting last week that 41 of its stores, out of 343 in SA, were affected. Spar reported that 184 stores or about 7% of its stores in Southern Africa, were damaged, including 62 liquor stores and 31 Build it stores.
Woolworths reported 11 stores were looted and severely damaged and one distribution centre partially vandalised.
Pick n Pay said the civil unrest had a significant effect on its operations in the affected areas. Of the group’s 212 food, clothing and bottle stores that were looted or set alight, 68 belonged to Pick n Pay and 68 to the Boxer discount chain.
Seventy-six were liquor stores, but they were not trading due to Covid-19 restrictions.
Thirty-two stores have already been cleaned, repaired and reopened or, in the case of bottle stores, are ready to reopen when regulations permit.
Pick n Pay said it was not yet possible to give a full assessment of the damage. It expected insurance to cover most of the losses, subject to delays and the unknown impact from the numbers of claims by affected businesses.
Pick n Pay chair Gareth Ackerman said: “Recent events underline the importance of food security in SA. Businesses like the Pick n Pay Group — alongside our valued partners, suppliers and producers — play a vital role in maintaining a sustainable and continuous food supply. In achieving this, businesses depend crucially on social, political and economic stability, effective security and fully functioning transport and other infrastructure.”
Pick n Pay said it had implemented a formal disaster recovery plan to restore affected operations in KwaZulu-Natal and Gauteng.
“The process of restocking stores across the region has been greatly assisted by our national, centralised distribution capability. Well over 200 trucks have so far been routed into KwaZulu-Natal from as far afield as the Western Cape and Gauteng to bring vital stocks to our stores in the affected areas,” the group said.