Massmart, owner of Game and Makro, has had 30 of its stores and a mass distribution centre in KwaZulu-Natal destroyed as thousands of rioters wreaked havoc across the province.
The industrial-scale looting comes as US owner Walmart continues to provide financial support to the ailing company, including a rolling R4bn loan and a new interest-free loan it announced in June.
Earlier in 2021, CEO Mitchell Slape said he expected the company to break even by year-end after two consecutive annual losses of more than R1bn.
Massmart has been undergoing a strict turnaround plan and trying to cut costs without enacting widespread job cuts, but has been hard hit by looting damage that erupted in response to the imprisonment of former president Jacob Zuma.
Senior vice-president of group corporate affairs Brian Leroni said the situation “remains fluid and we anticipate that more facilities are likely to be affected”.
The group has yet to establish how much damage has been caused.
“We are in the process of assessing the losses, which in cases is difficult given that we are unable to access some facilities, which have still to be secured by law enforcement.”
Massmart is also working on improving the quality and technology in its distribution centres capacity under the head of a longtime Walmart manager hired from Latin America.
Vaccination sites
But plans will be disrupted after the looting of its distribution centre in Riverhorse Valley, KwaZulu-Natal.
Police only took control of the centre late in the afternoon.
Clicks, SA’s largest drug and health and beauty retailer, said on Tuesday that 52 of its 760 stores have been damaged.
It had to close all 110 of its stores in KwaZulu-Natal and 130 stores in Gauteng, leaving customers unable to collect chronic medication, with public sector medicine pickup points being temporarily unavailable.
Clicks said 106 Covid-19 vaccination sites have been closed countrywide.
Stores owned by independent businesses and franchisees have not been spared. The damage is so extensive it could take months to rebuild.
Tony da Fonseca, CEO of OBC, a 70-store chicken butchery chain in townships and near taxi ranks, said the company had lost 10 of its stores since Monday.
“As the situation was allowed to continue, the stores have been destroyed and, in fact, will cost more than a new store to reinstate due to having to remove all the debris and rebuild infrastructure,” Da Fonseca said.
He estimated it will cost R9m-R14m to rebuild a store, and that is only if the buildings are still structurally sound. It could take at least six months to rebuild.
Had the looting been stopped after the goods were stolen and before being set alight, the damage would have been about R2.5m per store.
In some township strip malls, every store has been destroyed, leaving communities without nearby places to buy food or fetch social grants, said Da Fonseca.
OBC is not sending trucks with food to any stores for fear the vehicles will be looted or set alight.
“Our political leadership has let down the SA business owners,” Da Fonseca said.
Distell, the largest alcohol producer in SA and well-known for brands such as Klipdrift brandy and Savanna ciders, experienced extensive looting of a distribution centre in New Germany near Pinetown, KwaZulu-Natal.
Distell spokesperson Frank Ford said: “We have repeatedly warned that bans on alcohol fuel illegal activity, which has now worsened right across the areas affected by unrest.”
The National Clothing Retail Federation of SA that represents clothing manufacturers and retailers, such as Mr Price and Truworths, says riots that have hit KwaZulu-Natal will negatively affect the industry.
KwaZulu-Natal is the major distribution node for imported products such as fabric for local clothing manufacture and imported clothing, 70% of which lands at the Durban port.
But with so much damage to infrastructure, it will be difficult to manage clothing and manufacturing supply chains, the federation warned, saying it expects economic disruption until at least the middle of 2022.
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