Shoprite and Pick n Pay’s incredible diesel bills to keep the lights on

Pick n Pay and Shoprite revealed that they spend tens of millions per month to keep the lights on during load-shedding.

Pick n Pay said in its 2022 annual report that load-shedding – including the cost of running and maintaining diesel generators – significantly increased its operating costs.

All Pick n Pay and Boxer stores have backup power to operate without interruptions during load-shedding.

In its latest trading update, the retail giant revealed that it spent an additional R346 million year-on-year on diesel to run generators at stores in the first ten months of the year.

The costs were concentrated over the latter months and are currently on a run rate of approximately R60 million per month, depending on the stage of load shedding experienced.

Pick n Pay is also experiencing increased generator repairs and maintenance costs and some additional food waste costs.

“Diesel generators are not designed to run for many hours on end and suffer breakdowns,” Pick n Pay said.

However, it is not the only downside for the retailer, as severe load-shedding also creates significant challenges.

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

The production of food and other goods is also disrupted, creating stock challenges which can influence sales.

Pick n Pay’s update follows similar concerns from Shoprite regarding the impact of load-shedding on its operations.

Shoprite said it spent R560 million more on diesel to operate generators across its South African stores to trade uninterrupted during load-shedding stages five and six in the last six months.

What it means is that Shoprite spends an additional R93 million on diesel each month to trade during power outages.

It shows the impact of load-shedding on the retail sector, and the additional costs will filter down to the price of food and other products.