Retailers hammered by strike

2014-04-20 15:00

An incredible humanitarian and economic tragedy is flowing from the strike of about 80?000 workers in the platinum industry, which has now continued for an unprecedented 12 weeks.

Retailers and food distributers are reporting a dramatic collapse of buying power in parts of rural Eastern Cape, home to most of the striking mine workers.

Roelf Venter, commercial director of Spar, says the retailer’s management has discussed the collapse at a meeting.

“It’s hard to give specific figures at this point because it varies a great deal from place to place – and because it is happening in isolated places.

“There is, however, a clear and sharp downturn in the buying power of people in the Eastern Cape’s rural areas.

“It is virtually just as bad in KwaZulu-Natal and also noticeable in Limpopo,” says Venter.

“It is less severe in the Rustenburg area, except in the peripheral areas like Mooinooi and Marikana.”

More than 60% of the strikers are migrant workers from the poorest parts of the Eastern Cape, Lesotho and, to a lesser extent, KwaZulu-Natal.

Chris Schutte, CEO of Astral Foods, says sales of chickens around Rustenburg have fallen by between 30% and 40%.

Astral is the market leader in the area.

The drop is not necessarily in sales through large retailers like Shoprite, but in the informal settlements, where Astral has a large distribution system.

“At some distribution points in Rustenburg, sales have dropped by 50%,” says Schutte.

In the Eastern Cape, Astral has lost 11% of its revenue – after buying out a competitor in the region, he adds.

Theo Delport, managing director of Astral Poultry, says agents selling into informal businesses like spaza shops this week experienced their worst week of the year.

Usually, the Easter weekend is like a mini Christmas for retail sales, he says.

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