South African companies facing a permanent new reality – electricity shortages


South African companies are facing what retailer Pick n Pay Stores Ltd. has just called “a permanent new reality” — electricity shortages. The related costs are weighing heavily.

During a year that’s seen the worst national power cuts on record, the country’s biggest food retailers have increased investment in standby generators, rooftop solar panels and refrigerated trailer trucks.

Groceries giant Shoprite last week said buying diesel to keep stores lit during the heaviest of the rolling blackouts, known locally as load-shedding, cost an extra 560 million rand ($32 million) in the six months through Jan. 1.

Rival Pick n Pay spent an additional 346 million rand on diesel to run generators at stores in the first ten months of its financial year, it said Wednesday.

The power cuts may force it to reprioritize capital investment on an energy resilience plan, delaying spending originally earmarked for other demands.

The strategy will help Pick n Pay mitigate the “inconvenience” to consumers and reduce food waste, it said. The company’s shares slumped as much as 8.1%, the most since October, before paring losses to trade 5.1% lower at 12:14 p.m. local time.

“The government needs rapidly 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,” Pick n Pay said. Still, it’s “clear that progress will not be rapid.”.