Skip to main content

Retailers rue costs of power outages

| Economic factors

Two of SA’s largest retailers offered a measure of consumers’ financial health and the economy when they posted mixed-sales growth, indicating a squeeze on household spending, writes Zeenat Moorad.

Woolworths’ well-heeled customers largely insulated the retailer from a slowdown in consumer spending. However Massmart, whose four divisions target a broader range of consumers, saw strong growth at Makro and Builders Warehouse but Game was under pressure.

"Load shedding and its associated costs are really hurting the economy — we’re just going through a normal defensive cycle, where inflation and interest goes up and things get tough — the problem is that the body, the engine room is being hurt," said Massmart CEO Guy Hayward.

"It’s the worst I’ve seen (the economy) in 15 years."

Most retailers have generators, inverters or batteries but the drop in foot traffic at malls where other stores may not have emergency power, put a damper on sales.

Woolworths CEO Ian Moir also lamented the negative effect of load shedding.

Gross domestic product contracted in the second quarter, so it will be difficult for SA to achieve even 1% growth this year, says Wayne McCurrie, Momentum portfolio manager.

Pin It

Related Articles

By: Hanno Labuschagne - MyBroadband An anticipated strengthening of the rand and slipping global oil prices could result in lower petrol prices at the pumps next month.
By: Myles Illidge - MyBroadband Eskom has asked the National Energy Regulator of South Africa (Nersa) for a 36.15% electricity tariff hike for the customers it directly supplies and charges, Daily Maverick reports.
By: Yogashen Pillay – The Mercury Economists are predicting a big drop in petrol and diesel prices next month, saying it will bring much-needed relief to under-pressure consumers.
By: Jason Woosey - IOL Petrol and diesel prices are set to come down from Wednesday, June 5, according to a statement released by the Department of Mineral Resources and Energy (DMRE).
By: Opinion – IOL Business Report South Africans have been collectively waiting with bated breath for some small financial reprieve from the relentless price hikes of the past few years that have driven them to the brink of despair, chief among t...