JOHANNESBURG, Aug 24 (AN): South Africa's retail industry is feeling the pain from the coronavirus pandemic on two fronts - store closures during lockdown and the sharply reduced purchasing power of households.
South Africa, the continent's most industrialized economy, went into strict lockdown at the end of March, with people only allowed to shop for essential items such as food, medicine and winter clothing.
It is also the African country that has been hardest hit by Covid-19, with more than 600,000 cases and at least 2,500 deaths.
Restrictions have been gradually rolled back since June. Generally, business is now almost back to normal. Nevertheless, retailers are reeling from the economic effects of months of suffocating restrictions.
South Africa's Massmart - majority-owned by US giant Walmart - said that it expected half-year losses to widen by as much as 42 per cent as a result of the nationwide lockdown. Massmart was already in dire straits before the pandemic and closed a 23-store electronic retail chain and 11 wholesale outlets shortly before the lockdown came into effect.
"Retailers that were already taking the strain" in an economy that was contracting even before the outbreak have found themselves vulnerable to the virus fallout, said Casperus Treurnicht, portfolio manager at Gryphon Asset Management. South African shoppers have had to get used to wearing a mask, having their temperature taken at the door and using hand sanitisers.
And even as the economy reopens, shops will continue to enforce such measures in order to protect both staff and customers. Investment analyst Lulama Qongqo suggested that customers were likely to favor stores with visible hygiene measures.
"Retailers who cannot signal that it's safe to shop in their locations are probably going to lose, and perhaps those are the ones more likely to be plagued by the question: 'Can we survive?'" Qongqo told AFP.
But the measures come at a cost. Since the start of lockdown, South Africa's second-largest supermarket chain Pick n Pay has had to budget for protective equipment, a voluntary severance programme taken by 1,400 of its 9,000 employees and bonuses for front-line workers.
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