South Africa's Pepkor Holdings Ltd said on Tuesday it would add 71 stores by the end of the year, bringing the total to 6,000, as it seeks to build market-share even as the country's power crisis burdens both retailers and consumers.
South Africa faces its worst rolling blackouts on record, with up to 10 hours of daily power cuts. State utility Eskom has said the problem could get worse as the upcoming coldest months increase demand.
Power Crisis
Retailers, such as Pepkor, which operates a chain of consumer stores including affordable clothing store PEP and furniture store Rochester, have had to source back-up power or run diesel generators.
Pepkor uses inverters and generators at nearly three-quarters of its stores and spent around 72 million rand (€3.4 million) on diesel for the six months ended March 31.
Lost Turnover
In total, the company lost around 800 million rand (€37.8 million) in turnover, based on rough calculations, for the period due to power cuts, its CEO Pieter Erasmus told Reuters.
Its share price last traded at 1,341 cents, having lost over 11.5% of its value since Monday's close.
Shopping malls can be plunged into darkness even if individual stores can keep the lights on, which can lead to a widespread decrease in footfall during power cuts.
Inflation
Inflation has also meant customers focus their spending on essential goods rather than discretionary products.
Pepkor said it was adapting by concentrating on its most robust brands and planned to add a further 71 stores in addition to 168 added in the first half.
The company - which also operates in Mozambique, Zambia and Brazil - posted an 11.7% drop in half-yearly earnings on Tuesday.
News by Reuters, edited by ESM – your source for the latest retail news. Click subscribe to sign up to ESM: European Supermarket Magazine.
