Parts of South Africa already in stage 8 load-shedding – Pick n Pay CEO

Pick n Pay CEO Pieter Boone says parts of the country are already experiencing stage 8 load-shedding, which impacts food supply and creates water shortages.

He added that load-shedding would not have been necessary if the government had acted decisively to deal with structural problems.

Boone was speaking to Michael Avery on Classic Business about the company’s financial results for the year ended 26 February 2023.

Turnover increased by 8.9%, but trading expenses increased even more. It resulted in a significant decline in profit.

One of the biggest challenges for Pick n Pay is frequent power cuts which are forcing it to invest more in generators and diesel.

“Load-shedding has had a material impact on our result, particularly through massive increases in diesel costs,” the retailer said.

Pick n Pay spent R522 million on diesel to run generators in the 2023 financial year. Because of intensified power cuts, it is now spending around R60 million a month on diesel.

However, investing in generators and buying diesel is only a small part of the impact of load-shedding on Pick n Pay.

Boone told Classic Business that they experienced additional waste at stores because of frequent power cuts.

Another problem is the rise in theft and organised crime at their stores. “The number of robberies is going up because of load-shedding,” Boone said.

He added that there are food supply-chain disruptions because of load-shedding, which is set to worsen with higher load-shedding levels.

He said there are already shortages in some food categories and warned that it would create increased social tension.

“Further instability of food supply will occur because of a deterioration of South Africa’s power supply,” he said.

He warned that when South Africa goes to stage 8, there will be a shortage in the production of basic foods.

He said some parts of the country are already experiencing higher levels of load-shedding than what Eskom officially announces.

“I can assure you that in certain parts of the country, we are already in stage 8 load-shedding,” Boone said.

Pick n Pay has stores across South Africa and closely monitors power outages and generator usage at these stores.

The retailer is, therefore, in a good position to track the load-shedding hours and equate it to load-shedding stages.

Boone warned that stage 8 load-shedding across South Africa would result in significant food and water supply in part of the country.

He added that it is no longer about the pricing of food but rather the availability of basic foods like bread.

“When you take away two of the most important things to an individual – food and water – it will lead to social instability,” he said.

“That is my biggest fear – potential social unrest. We cannot afford a second wave of social unrest in South Africa,” he said.

Eskom accused of false load-shedding levels

Boone’s comments echoed energy expert Adil Nchabeleng’s accusation that Eskom has decided not to inform the public when it exceeds stage 6 load-shedding.

Nchabeleng added that South Africa is already experiencing much higher load-shedding stages than reported.

“Eskom has decided to cap its announcements at stage 6 load-shedding, avoiding announcing stage 8 or higher load-shedding,” he said.

“They are giving us the impression that everything is oscillating around stage 6, which is a lie. It is beyond stage 6 when considering the frequency of power cuts.”

“We are sitting at a minimum of 12 hours of electricity cuts on a given day, and they are blanketing out major areas.”

He said Eskom manages its communications regarding the load-shedding stages it announces to avoid social unrest and related problems.

The table below shows cases where Eskom exceeded 6,000MW of load-shedding, which equates to stage 7 and stage 8 load-shedding.

However, Eskom denied exceeding stage 6 load-shedding. It explained that during these days, it implemented stage 4 load-curtailment to limit load-shedding to stage 6.