Big struggles for retailers in South Africa during lockdown

The coronavirus lockdown is making operations difficult for businesses across South Africa.

Retailers are included among those heavily affected by the national lockdown.

While some of these businesses are able to offer essential goods to customers, the reduction in customers and the limits on what they may sell make the lockdown a difficult challenge.

MyBroadband spoke with South African retailers about how the lockdown is affecting their businesses.


Edcon

Edcon said that following the president’s first announcement on 16 March regarding a lockdown, its turnover has declined 45% compared to the same period last year.

Additionally, its sales and cash for the month of March were R400 million below forecast, and it expects it will lose a further R800 million in turnover during the lockdown period.

It has made the payment of salaries to its employees a priority, and has been looking for a workable solution to achieve this.

“In an effort to help carry the burden of the impact of the COVID-19 virus and the lockdown, and after consultation and communication, the CEO, Grant Pattison, has made a decision to take a 100% temporary cut in salary,” said Edcon.

Additionally, the company’s executive committee has agreed to a 30% temporary cut in their salaries, and the rest of the executives have agreed to either 20% or 10% temporary salary cuts based on their roles.

In contrast, all non-management staff will receive their full salaries.

Edcon has also applied to the UIF in terms of the Temporary Employer-Employee Relief Scheme (TERS) and was awaiting the outcome of the application at the time of writing.

“The Edcon leadership team, together with the executives, are working tirelessly in putting together business plans for post the lockdown and engaging government and funders to find a way of plugging the financial hole created by the coronavirus crisis,” said Edcon.

“We will keep all stakeholders updated as these developments unfold. We are aware that we are not the only business facing these challenges, and it’s going to require all businesses, government and citizens to work together to minimize the damage the virus is having on our economy.”

Edcon operates the Edgars and Jet brands.


Shoprite

Shoprite directed MyBroadband to its dedicated coronavirus page which outlines how it is responding to the lockdown.

“We are doing everything in our power to ensure our doors will remain open, our stores remain safe and our prices remain low,” said Pieter Engelbrecht, CEO of Shoprite Group.

Shoprite outlines the following measures it has taken:

  • The Shoprite Group is committed to adhering to the strict measures put in place by the South African government.
  • It is tracking the guidelines and advisory updates of the World Health Organisation, the National Institute of Communicable Diseases (NICD) and participating in discussions with the Consumer Goods Council of South Africa.
  • A special executive-level task committee, under the leadership of CEO Pieter Engelbrecht, convenes every 24 hours.
  • The Shoprite Group supports the government’s Solidarity Fund.

Shoprite is also supplying 23,000 meals to soup kitchens per week and is providing surplus food to over 150 community organisations.

Shoprite is also providing priority entrance and quick checkouts to healthcare and law enforcement personnel, as well as the elderly and disabled.

The company did not provide feedback on the impact of the virus on its revenue.


Woolworths

The Woolworths Group previously announced pay cuts for its CEO, board directors, and senior executive managers in a recent trading update.

This will see them forego 30% of their fees and salaries over the next three months.

“The savings arising from this will be used to provide additional financial support to staff who find themselves in extreme hardship as a result of the current crisis,” Woolworths said.

The company said the majority of its food outlets remain open during the lockdown.


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Big struggles for retailers in South Africa during lockdown