Load-shedding costs retailers millions a month

Load-shedding has cost South African retailers millions of rands, and the costs are not likely to go down anytime soon. It could push these expenses onto their customers.

M&G Investments equity analyst Damon Buss told 702’s The Money Show that large South African retailers have had to pay millions monthly to stay afloat during load-shedding.

The speed at which load-shedding ramped up at the end of 2022 – when South Africans faced stage 6 for a large part of November and December – greatly affected retailers.

The festive season is usually the retailers’ key trading period, where most of their sales are made.

Load-shedding affects retailers in many ways, but two effects stand out.

  • The first impact is less foot traffic during load-shedding. When a power cut occurs, a retail store becomes an unattractive shopping environment for customers, leading to retailers losing potential customers during those periods.
  • The second – and likely most significant – impact is diesel expenditure. Many retailers have had to spend millions monthly on diesel to power their generators during load-shedding. This expenditure has significantly increased retailers’ operating costs and cut their profit margins.

Buss said many of the country’s largest retailers announced big store roll-out plans for underserved rural areas in the past 18 months. 

However, load-shedding has forced them to reallocate their capital towards batteries, inverters, and other alternative energy solutions.

Many retailers also have to invest in new, stronger generators since many of the generators they bought when load-shedding was first implemented were only designed to act as a backup solution.

Buss said that despite the effects of load-shedding, many South African retailers still have healthy balance sheets and can, therefore, afford to invest in backup energy solutions. They still see opportunities in South Africa and have not changed their store roll-out plans.

However, he warned that the millions lost due to load-shedding is still concerning for retailers, as it creates uncertainty for the country’s outlook and how it will be affected by load-shedding in the long term.

In addition, food retailers have been particularly impacted by load-shedding, as they, unlike clothing or furniture retailers, have to keep fridges and freezers running during power cuts.

Food inflation is also at a 14-year high with little sign of coming down, which adds to food retailers’ operating costs. 

Buss warned that retailers would not be able to absorb all these costs for much longer, which means it will come down to the consumer to pay for the effects of load-shedding. 

Below is an overview of how load-shedding has affected some of South Africa’s largest retailers. All the companies mentioned below saw growth over the reported periods but also lost millions due to load-shedding.


Africa’s largest supermarket chain, which owns Checkers and U-Save, saw net income surge to R3.25 billion in the six months ended 1 January 2022.

Shoprite’s South African supermarket business saw trading profit rise 7.7% to R5.4 billion. 

However, profit growth was hampered by load-shedding as trading margins at the company’s South African unit slid to 6.3% from 6.9%.

This is because Shoprite spent R560 million on diesel to operate generators at its South African stores in the six-month period.

This came after the company announced in November 2022 that it was spending R100 million a month on diesel. 

Pick n Pay

Pick n Pay

In its financial results for the year ended 26 February 2023, Pick n Pay grew its South African sales by 4.3% and increased group turnover by 8.9%.

However, the company also said, “Load shedding has had a material impact on our result, particularly through massively increases in diesel costs.  We are accelerating our energy resilience plan to mitigate these costs in the future.”

Pick n Pay spent an incremental R522 million on diesel to run generators in FY2023.

According to the company’s trading update for the 43 weeks ended 25 December 2022, depending on the load-shedding stage, Pick n Pay spends around R60 million a month on diesel.

The company also said it is experiencing increased generator repairs and maintenance costs and additional food waste costs due to load-shedding.


Woolworths’ interim results for the 26 weeks ended 25 December 2022 were overwhelmingly positive, despite the effects of load-shedding.

The company saw total profits jump 70% in the period, and headline earnings per share were up 75.1%.

However, Woolworths said load-shedding significantly impacted its operating profit. It estimated a reduction of around R15 million per month due to increased diesel and waste costs.

The Foschini Group


The Foschini Group (TFG) saw retail turnover growth of 20.8% for the nine months ended 31 December 2022 and 17.3% growth in Q3 FY2023 (compared to Q3 FY2022)

However, the company was severely impacted by load-shedding. TFG estimates that it lost 345,000 trading hours in the 11 months that ended 8 February due to load-shedding.

These lost trading hours contributed to an estimated R1 billion in lost sales in the 11 months.

The company also incurred costs of around R65 million for diesel, security and maintenance due to load-shedding.

The company has spent R220 million in capital expenditure to date on backup power solutions.