Checkers allows customers to shop during load shedding at a cost of R1 billion annually

Retailer Shoprite in South Africa disclosed that, in order to power generators at its stores during periods of load shedding, the company spent R500 million on diesel in just six months.

Retailer R1 billion a year fighting Eskom's rotating power outages if load-shedding kept going in the same direction. The previous year, it also expended an equivalent sum.

"During the six months ended December 31, 2023, load-shedding-related power outages resulted in an R500 million diesel expense to operate generators throughout our South African supermarket business," Shoprite stated.

In spite of this, the retailer stated that during the course of the six months, sales growth for its supermarket business in South Africa was 14.6%.

This, however, is a slower growth rate than the 17.5% recorded for the same time previous year.

“The Group’s core business, Supermarkets RSA, contributing 80.5% to Group sales, achieved sales growth of 14.6%,” said Shoprite.

The six months that ended on January 1, 2023, or the "first half 2023," are used to compare this growth to that time, when sales rose by 17.5%.

The R500 million diesel expenditure amount disclosed in the company's H1 2023–2024 operational update is largely in line with what it disclosed for the same period in the previous year.

During the second half of 2022, Shoprite reported that it had to spend R560 million on diesel to maintain trading during load-shedding, or roughly R93 million every month.

One South African retailer suffering greatly from Eskom's intermittent power outages is not the owner of Checkers.

The cost of running diesel generators at Pick n Pay's stores was disclosed in the company's 2022 annual report as R346 million.

Customers can continue shopping during load shedding at all Pick n Pay and Boxer locations thanks to backup power.

Depending on the stage of load shedding, Pick n Pay reported that up to R60 million was spent on diesel per month, with the majority of the additional costs occurring towards the end of 2022.

But load shedding affects grocery stores in ways other than diesel prices.

During load-shedding, Pick n Pay reported that it also faced higher maintenance and repair expenses, some extra food waste, and decreased customer demand.

Pick n Pay stated that "diesel generators are not designed to run for many hours on end and suffer breakdowns."

Customers' demand is said to have decreased as a result of load-shedding's disruptions and inconveniences as well as worries about food spoiling at home during blackouts.

There is a disruption in the production of food and other goods as well, which can affect sales by causing issues.