HomeNewsFestive season power cuts to impact retail businesses in South Africa

Festive season power cuts to impact retail businesses in South Africa

Power outages may well play a key role in festive season shopping, with retailers bracing themselves for disruptions in the wake of traditional electricity consumption spikes and increased cable theft in the upcoming holiday period.

This is the view of Jack Ward, MD of Powermode, a power provisioning company. He says retailers without standby power generators could be impacted by failing electricity distribution systems as well as a predicted ramp-up in cable theft this summer.

“Conditions are ripe for unplanned power outages. This is due to an alarming lack of maintenance to many of the major electrical distribution systems. Maintenance is generally the responsibility of local authorities, many of which are cash-strapped and unable to respond to the imminent crisis.”

Ward underlines the seriousness of cable theft, with many organisations reporting losses running into millions of rand in the wake of cable-theft-induced power cuts.

While the number of standby generator installations in the retail sector has been steadily increasing over the last couple of years, Ward says that many shopping malls are equipped to generate sufficient backup energy only to power essential services, such as emergency lighting.

“Even if a store has its own independent generator – sometimes prohibited by mall owners – the impact of a power failure on shoppers tends to be immediate. They will leave the store.”

He refers to a report from a large retailer estimating the cost to the company of a power outage at over R50,000 per hour in lost sales per outlet. Fast food restaurants are among the hardest hit by power outages.

“This, coupled with the deterioration in consumer spending, tightening national credit act (NCA) regulations and shopping centre rental escalations of around 15%, could have negative implications, particularly for smaller players.”

Ward cites a report emanating from one of the largest retail chains which details spending of more than R120 million on generators for its stores throughout SA enabling them to cope with blackouts.

Ward encourages all retailers to adopt a similar, forward-looking approach and invest in appropriate standby power solutions geared to meet their needs. “Those that don’t are putting themselves at risk,” he stresses, adding that a commitment to a regular maintenance regime is also vital to address generator reliability issues.

“Without regular servicing diesel generators may well not start when called up to do so in an emergency. There have been a number of reports highlighting such occurrences in the media lately,” he says.

“Much like an insurance policy, its value might not be immediately apparent, but in a crisis situation a maintenance plan will become priceless.”

Picture: Jack Ward, MD of Powermode