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Despite positive sales growth, grocery retail chain Pick n Pay said it spent nearly R350 million on diesel to keep generators running at its stores in a bid to eschew the impacts of load shedding on its operations.

As a result of unending and increased rolling power cuts, which South Africa has experienced for more than three straight months since the end of October, consumer demand has dampened, with consumers concerned about food spoiling at home, Pick n Pay said on Wednesday.

The group, which has over 1 910 stores in South Africa, released a trading update for the 43 weeks ended 25 December 2022, saying it spent an additional R346 million on diesel during the first 10 months of its financial year, compared to the prior period.

It said the costs were saturated over the latter months and estimated its diesel bill at approximately R60 million per month, depending on the load shedding stages implemented.

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

“The production of food and other goods is disrupted, creating stock challenges. Diesel generators are not designed to run for many hours on end and suffer breakdowns,” said Pick n Pay.

It further said it is incurring increased generator repair and maintenance costs and additional costs related to food waste.

Group sales for the reporting period grew 9,3 percent, while sales for its core South African operations increased 9 percent.

For its rest of Africa operations it achieved double-digit sales growth of 17 percent.

Group turnover is up 9,3 percent, Pick n Pay said.

The group added it is focusing on an energy resilience plan, in attempt to mitigate the impact of South Africa’s power crisis, which includes negotiating with retail landlords to maximise solar installations and doubling efforts to reduce energy consumption.

It is also look at installing inverters and battery power solutions to operate supermarkets sustainably, among other plans.

“It is clear that progress will not be rapid. The group therefore takes the view that the current crisis is a permanent new reality, requiring a rapid, determined and concerted response.

“The government needs … 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,” it said. – Moneyweb