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Shoprite warns imports of blankets and heaters worth R100 million could be hit by coronavirus

| Supplier news

Shoprite is at risk of losing about R100 million in sales as the novel coronavirus disrupts imports of winter products from China.

A spokesperson told Business Insider South Africa that, while the company is not foreseeing a “material impact on its operations”, turnover of R100 million is at stake due to product orders from China being delayed by measures associated with attempts to control the Covid-19 virus. 

 

“Mainly shipments with winter products such as heaters and electrical blankets are affected,” a spokesperson said.

Shoprite continues to monitor the situation and remains in daily contact with factories and suppliers.

“Where needed, contingency plans have been put in place to mitigate the order delays and cancellations, including switching the source of supply to other countries like Bangladesh, Ukraine and India,” the spokesperson said. 

The coronavirus outbreak has wreaked havoc on Chinese manufacturing, which has now been severely disrupted for more than a month.

Manufacturing at Chinese factories has stalled since the start of the Chinese new year, on 25 January.

While the factories were supposed to only be closed for four days for that national holiday, government ordered factories to remain shut for the next two weeks as the outbreak of the virus intensified, in quarantine measures were put in place.

The Chinese government then ordered all factories to open again on 10 February, but few have returned to full capacity as many people remain at home to avoid infection.

Apple and other major companies have warned that the manufacturing disruption is hitting product supplies.

Airfreight has also been disrupted as major airlines cancel flights.

Some 16% of South Africa’s imports come from China. China is also SA’s biggest export destination, taking 11% of all of SA exports.

Earlier this week, Shoprite reported sales of R81.2 billion for the half year to 29 December, an increase of 7% from the same period in the previous year.

 

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