Pick n Pay spends roughly R350 million on diesel in just ten months

Retailers encourage the government to come up with a long-term solution to load shedding as soon as possible.

Despite increased sales, supermarket retailer Pick n Pay said it spent about R350 million on fuel to keep generators operating at its stores in order to avoid the effects of load shedding on its operations.

Consumer demand has slowed as a result of South Africa’s ongoing and increased rolling power outages, which have lasted more than three months since the end of October, with consumers concerned about food rotting at home, according to Pick & Pay on Wednesday.

The firm, which has over 1 910 outlets in South Africa, issued a trading statement for the 43 weeks ending December 25, 2022, stating that it spent an additional R346 million on fuel during the first ten months of its fiscal year compared to the previous time.

It said that the expenses had been saturated in recent months and predicted that its fuel price would be around R60 million per month, depending on the load shedding phases adopted.

“Customer demand is dampened as a result of disruption, inconvenience, and a concern that food may spoil due to interruptions to power at home,” the retailer said.

“The production of food and other goods is disrupted, creating stock challenges. Diesel generators are not designed to run for many hours on end and suffer breakdowns,” said Pick n Pay.

It also stated that it is experiencing greater generator repair and maintenance expenses, as well as additional expenditures associated with food waste.

Group sales gained 9.3% in the reporting period, while sales in its core South African activities increased 9%.

Its activities in the remainder of Africa grew by 17% in double digits.

Pick n Pay reported a 9.3% increase in group turnover.

In order to offset the impact of South Africa’s power crisis, the organisation is focused on an energy resilience strategy, which includes working with retail landlords to maximise solar installations and boosting efforts to cut energy consumption.

Among other things, it is looking at adding inverters and battery power solutions to run stores more responsibly.

“It is clear that progress will not be rapid. The group therefore takes the view that the current crisis is a permanent new reality, requiring a rapid, determined and concerted response.

“The government needs … to come forward with a sustainable plan to solve the electricity crisis, including by taking every step possible to ease the way for businesses to generate and use their own sustainable energy,” it said.