Hard-hit retail liquor industry counting sales and job losses
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THE SOUTH African liquor industry had haemorrhaged at least R8.5 billion in lost sales plus about 3 000 jobs and still counting from the 4-day trade restrictions imposed on retail liquor stores, it said yesterday.
According to research conducted by the Institut de Publique Sondage d’Opinion Secteur South Africa, commissioned by the Consumer Goods Council of South Africa (CGCSA) and the Liquor Traders Association of South Africa (LTASA), liquor retailers have been losing about 50 percent of revenue they would have earned from Thursday to Saturday, yet overhead costs have remained unchanged.
In a statement on the research yesterday, liquor retailers said revenue losses for small liquor outlets were as high as 65 percent of weekly turnover between Friday and Sunday.
“To put this in perspective, aggregate loss in sales since the inception of lockdown stands at approximately R8.5 billion, sales volume has dropped by between 20 and 50 percent across the retail formats per month and with 60 percent of convenience trading being done mostly post 5pm on weekdays and on weekends these figures are predicted to continue on a downward scale with great harm to business and jobs,” the CGCSA said.
In addition to cutting staff and costs, retailers have been negotiating with landlords to reduce rentals, which in turn affects the revenue of commercial property owners.
The research found that some retailers had reduced the working hours and wages of staff, and diversified products/service lines or changed/ improved operations model to adapt to new conditions. Others had explored e-commerce focus/capabilities, cut discretionary spending, cancelled salary increases, renegotiated leases or debt repayments, or applied for government support, although not all have received the required funding.
“Given the impact of the severity of the lockdowns so far, and considering that some retailers may need at least six months to fully recover from successive lockdowns, further retrenchments cannot be ruled out,” the research found.
The research found that nearly 3 000 jobs had already been lost in the more than 1 400 independently owned liquor store sector, which employs more than 14 000 people.
“Many of these stores are black-owned and employees are breadwinners, the majority being black female. With each store on average employing five people – excluding service providers’ employees, such as merchandisers, security workers and cleaners – these are at real risk of losing jobs with devastating consequences,” it said.
The LTASA said the economic impact of the restrictions had been dramatic and devastating on small, medium and micro-enterprise businesses.