Pick n Pay and Shoprite give their riot updates

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Pick n Pay and Shoprite give their riot updates

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Published Date: 2021-07-21 | Source: INCE|Community | Author: The Finance Ghost

Pick n Pay and Shoprite give their riot updates

The market has been waiting for updates from Shoprite and Pick n Pay on the damage from the riots last week. Updates have already been given by Woolworths and Spar, although the Spar update was weirdly only available as a press release rather than a SENS announcement.

Pick n Pay

A significant portion of the property portfolio was looted or damaged, with 212 stores finding themselves on the receiving end of criminal elements.

Under the Pick n Pay banner, damage was suffered by 28 corporate-owned supermarkets, 15 franchise stores, 29 Pick n Pay Clothing stores, 14 Express Convenience stores and 9 independent Market stores, taking the total to 68 Pick n Pay stores.

Boxer also suffered damage to 68 stores, of which 64 are supermarkets. Boxer is Pick n Pay's lower-LSM business and the stores are thus located in more vulnerable and volatile areas. Considering Boxer is also headquartered in Durban and is relatively stronger in KwaZulu-Natal than in some other provinces, I'm not surprised to see that the damage is extensive.

The remaining 76 damaged stores are liquor outlets across Pick n Pay and Boxer.

Of the 136 non-liquor stores, 32 have already been cleaned and repaired and either have reopened or will reopen by the end of this week. By that stage, 7% of the store footprint will still be closed.

On top of this, two distribution centres in Pinetown were damaged. Impressively, both DCs have been repaired and restocked.

The food supply chain is far more localised than the general merchandise items sold by the likes of Game, so the food retailers are able to recover faster than groups like Massmart.

Food retail is clearly a massive social responsibility and the group made use of its centralised distribution capability to get supplies into the affected regions. In addition, the Feed the Nation programme was used to provide emergency relief to communities.

Shoprite

In a prime example of "owning the narrative", Shoprite introduced its announcement by noting that the remainder of nationwide operations traded so strongly last week that the RSA Supermarkets segment still achieved positive turnover growth.

Of course, we know this was due to stockpiling. That toilet paper will last a while, so sales for the month will almost certainly feel the impact of the looting.
119 stores in the group were severely impacted by the looting. This includes 69 Shoprite, 44 Usave and six Checkers stores, including one hypermarket that became a favourite of the news channels for its fiery personality. 54 of the LiquorShop stores were also impacted.

This is approximately 10% of the group footprint, hence why the sales performance last week can only be a result of stockpiling across all other regions.

The fresh produce distribution centre in Durban was looted but has since been restocked. Other distribution centres were back in operation by Thursday last week.

The Furniture division wasn't spared either, with 35 stores severely damaged out of a total footprint of 340 stores. The OK Franchise division got off lightly, with only 16 stores damaged out of a total of 444.

Transpharm, the wholesale pharmaceutical business, escaped unharmed. That's obviously an important piece of positive news for medicine availability in affected regions.





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