South African retailer Shoprite has revealed that it spent R500 million on diesel in six months to run generators at its supermarkets in the country during bouts of load-shedding.
If load-shedding continued on the same trajectory, the retailer would spend R1 billion a year fighting Eskom’s rotational power cuts. It also spent a similar amount last year.
Despite the challenges posed by load-shedding, Shoprite reported that its supermarket business in South Africa achieved sales growth of 14.6% during the six months. However, this represents slowed growth from the 17.5% it reported for the same period last year.
Shoprite’s diesel expenditure figure of R500 million for the first half of 2023/24 is consistent with what it revealed for the same period last year.
The company stated that it spent R560 million on diesel to trade uninterrupted during load-shedding in the second half of 2022, which equates to approximately R93 million per month.
Shoprite is not the only retailer affected by Eskom’s rotational power cuts. Pick n Pay’s 2022 annual report revealed that it spent R346 million during the year to run diesel generators at its stores. All Pick n Pay and Boxer stores have backup power to allow uninterrupted shopping during load-shedding.
In addition to the cost of diesel, retailers like Pick n Pay also face increased maintenance and repair costs, additional food waste, and dampened customer demand during load-shedding.
The disruptions and inconveniences resulting from power outages lead to diminished customer demand and can also disrupt the production and availability of goods, impacting sales.
The impact of load-shedding on retailers highlights the need for sustainable and reliable power solutions in South Africa. Finding alternative energy sources and improving the stability of the power grid are crucial for the long-term success of the retail industry and the overall economy.