Following the civil unrest that South Africa experienced last week, JSE-listed supermarket groups Shoprite and Pick n Pay have stated their losses and recovery plans.
Supermarkets and their associated clothing and liquor stores were prime targets of mass groups of looters that wreaked havoc on retail centres across KwaZulu-Natal and certain areas of Gauteng.
Shoprite says it is adequately insured for material damage to assets, stock and business interruption. While some necessary irrecoverable costs have been incurred related to protecting operations, they are not expected to be material at a group level.
Of the 1 189 supermarkets trading under the Shoprite, Usave, Checkers and Checkers Hyper banners, 119 stores were severely impacted as a result of looting and/or fire damage.
Of the group’s 537 LiquorShop stores, 54 have been impacted, on top of the impact of having restricted trading conditions during the current Level 4 lockdown.
The Shoprite group’s Freshmark distribution centre in Durban was also looted, but its operational capacity has since been fully restored as of July 18.
Shoprite says its Gauteng-based distribution centre has operated seamlessly throughout the unrest, while its KwaZulu-Natal dry goods distribution centre has resumed deliveries to stores as of July 15.
Most of the Shoprite stores that were closed on a precautionary basis have been reopened.
The group is committed to rebuilding and restoring operations as quickly as possible.
Moreover, 35 of Shoprite’s 340 furniture stores experienced severe damage from vandalism, looting and/or fires and some stores remain closed as a result of landlords keeping centres closed.
This while 16 of its 444 OK stores based in South Africa were damaged. All but two of these stores have been reopened.
Fortunately, Shoprite’s Transpharm wholesale pharmaceutical business did not experience any disruption and, together with the MediRite Pharmacies business, continues to supply medicine to hospitals in all provinces.
PICK N PAY
Pick n Pay says it also has been able to reopen stores in KwaZulu-Natal and Gauteng that were closed as a precaution, and a large majority of its stores are now fully open and trading.
Of Pick n Pay’s approximately 1 600 stores, 136 were looted and/or damaged by fire, of which 68 were Pick n Pay stores and 68 Boxer stores. Most of these were company-owned supermarkets, but some franchise stores also bore the brunt of destruction.
The remaining stores that were damaged comprised Pick n Pay Clothing stores, Express Convenience stores, independent Market stores and Boxer Build stores.
Additionally, 76 liquor stores across Pick n Pay and Boxer were looted or burned, although these stores were not trading amid lockdown restrictions.
Of the total 136 stores damaged or looted, 32 have been cleaned, repaired and reopened. By July 24, Pick n Pay expects the proportion of store network still closed to have reduced to 7%.
Two of Pick n Pay’s distribution centres in Pinetown were looted and damaged, but both of these will soon restart operations.
In the meantime, Pick n Pay and Boxer stores in KwaZulu-Natal are being serviced from the group’s Boxer distribution centre in Lynnfield.
Well over 200 trucks have been routed to include KwaZulu-Natal from as far afield as the Western Cape and Gauteng to bring vital stocks to stores in affected areas.
Pick n Pay was not yet able to quantify the costs incurred to repair damages or mitigate against further losses. The group does have insurance in place to cover material damage and loss of profits associated with such events.