Clothing and food retailer Woolworths is counting the costs of the damage after 11 of its stores were looted and one distribution centre partially vandalised.
Woolworths joins other retailers that have suffered a similar fate in Gauteng and KwaZulu-Natal, which were gripped by social unrest last week.
The unprecedented violence has dealt a blow to SA’s efforts to attract investment to boost the economy, crippled by the Covid-19 pandemic. President Cyril Ramaphosa has labelled the riots a failed insurrection.
Updating the market on Monday, Woolworths said it had resumed operations in areas where it believed it was safe, after nine of its stores were targeted in KwaZulu-Natal and two in Gauteng.
However, the rebuilding and repair of the affected stores is likely to take some time following the assessment of the damage. Trading will depend on the resumption of supply, logistics and operational activities at these stores.
The potential losses will be covered by Sasria, the only insurer in SA that provides cover against public disorder, as well as business interruption cover.
Woolworths shares rose as much as 2% on Monday before turning weaker in line with the broader market. By the close they were down 0.53% to R52.89.
The company, which has operations in SA and Australia, also updated shareholders about trading conditions for the 52 weeks ended in June.
Group sales rose 9.7% for the review period, compared with the same period a year earlier and 5.9% in constant currency terms. The acceleration in the adoption of e-commerce, off a very low base in SA, boosted sales in its food and clothing businesses.
“Trade across the group continued to improve, notwithstanding the continued uncertainty and business disruption exacerbated by the delay of the Covid-19 vaccine rollout, further outbreaks and related lockdowns across both SA and Australia,” Woolworths said in a statement.
“The improved trade performance, coupled with strong working capital management and the proceeds arising from the property sales in Australia, have resulted in positive cash flows and a significant reduction in net debt across the group.”
Its food business fared better than clothing in terms of sales, driven partly by gains in market share, the retailer said. Sales in the food business rose 6.9% and 5.7% on a comparable store basis. Online sales in this division grew 117.9%, contributing 2.3% to SA food sales.
The sales performance of the Woolworths fashion, beauty and home business, known as the clothing division, was being affected by several factors, including the constrained environment, the decline in demand for formalwear, and initiatives to streamline private-label offerings and rationalise unproductive space, Woolworths added.
Total revenue for that segment rose 3.5% and 4.2% in comparable stores. Online sales grew 114.4%, contributing 4.1% to SA sales.
In Australia, department store chain David Jones sales rose 2.3% and 0.9% in comparable stores. Online sales rose by 24.4% and contributed 17.3% to total sales.
Clothing chain Country Road Group delivered sales growth of 13.4% and 15.3% in comparable stores. Online sales surged 30.7% and contributed 29.7% to total sales.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.