Retail group TFG, the owner of Foschini, Jet and Markhams, said loadshedding has reduced its full-year turnover in its local operations by R1bn.

In a voluntary trading update before its investor call this week, TFG said on Monday the energy crisis and elevated levels of loadshedding is affecting South Africa's economy and society, making it difficult for businesses to trade, operate and plan at normal levels. 

“While we remain focused on minimising the operational and financial affects of loadshedding, we estimate the financial impact to have reduced TFG Africa's retail turnover by  about R1bn” in the 2023 financial year.  

This is adding abnormal costs to the business, including the inability to pass on the affect of inflation and the costs of dealing with loadshedding to the consumer in full. The group said retail footfall has declined in some regions because of loadshedding and this, together with a change in consumer spending patterns, has affected all South African retailers.

TFG also incurred additional unbudgeted direct costs of R65m for diesel, security and maintenance. 

The affect of high levels of loadshedding would have been significantly worse were it not for the back-up power solutions installed over the past few months, which now provide partial mitigation to about 70% (by turnover) of the South African shops, TFG said.

To date, TFG has spent R220m on back-up power solutions and an additional R30m will be spent in its 2023 financial year to ensure that 80% (by turnover) of TFG Africa's shops have back-up power over the next few months. 

The company said back-up power solutions are effective up to stage 4 loadshedding but less effective at stages 5 and 6.

“Loadshedding in South Africa is expected to continue to have a significant impact on our business” in the 2023 and 2024 financial year.

“We continue to monitor the impact carefully but, given this prevailing uncertainty, it is difficult to predict with accuracy the extent of these affects,” it said.

Other companies have also highlighted the high costs and negative affects of loadshedding.

Hotel and casino group Sun International said on Monday in its full-year results to December that it incurred diesel expenses of between R12m and R14m a month and MTN said power supply was an ever-increasing risk last year with 208 days of load-shedding, with 146 of these in the second half of the year.

“This affected not only network availability, but also some business functions which hampered our customers’ ability to recharge and upgrade their packages,” MTN said.

Last week the CEOs of some of South Africa's biggest companies expressed concern about load-shedding, crumbling infrastructure, corruption and crime issues. 

Cas Coovadia, CEO of Business Unity South Africa, said President Cyril Ramaphosa was running out of goodwill with business leaders after he asked them at last month’s Mining Indaba to “get out of their armchairs and work with the government”  — when business had been doing that for years.

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