• Retail Suite Media

SA retailers faced with a number of challenges caused by Covid‐19 pandemic

The South African currency has taken several knocks since the outbreak of the COVID‐19 coronavirus which continues to wreak havoc around the world, affecting both developed and developing nations. World economies rely heavily on the supply of goods coming from China, and although China seems to be making inroads in containing the spread of contagion, infection rates are climbing globally and supply may be constrained for the foreseeable future. In addition, South Africa is not immune to the global economic crisis, and the Rand has lost value against major currencies. The recent announcement of non-essential movement restrictions in the form of a 21‐day national lockdown will only exacerbate the situation.

Additionally, global investors are being cautious by moving their investments away from riskier markets, and developing countries are thus facing incredible challenges to their economies. Making matters worse in South Africa is the rolling blackouts that have severely impacted business confidence in the country, reaching the lowest in 20 years ‐ according to FirstRand’s Rand Merchant Bank Unit and Stellenbosch University’s Bureau for Economic Research.

The ZAR falling in value against major currencies means that it becomes a little more expensive for importers to bring goods into the country. But this is not the only economic concern accompanied by the coronavirus: South African retailers who source many goods from China may experience supply and stock shortages, and may continue to do so over the coming months. The supply chain bottlenecks emanating from China as a result of the pandemic have affected goods supply across the world. The good news is that China is getting back to business, and this provides light at the end of the tunnel for all of us entering a shutdown.

According to Michael Cilliers, After Sales Service Manager at online retailer Teljoy, it’ll always be difficult or impossible to predict something like this ever happening: “For retailers and suppliers that have not stocked up from the Asian markets to be able to meet local demand, at least until the spread of this virus is contained, it’s going to be difficult to remain in business. However, even those who have stocked up, or those with local supplier assembly plants, it will still be difficult to meet demand as the recently announced lockdown kicks in. So, we encourage Teljoy customers to use the online shopping platform which functions everyday, all day, to buy their household items. That said, shoppers should be cognizant of the delays in delivery of goods due to the restrictions imposed by the shutdown.”

Teljoy uses suppliers that have assembly plants in the country, but the reality is that these assembly plants are also subject to the shutdown. Teljoy CEO, Jonathan Hurvitz says, “As a business we are affected because even though some of the products and parts we stock can be procured locally, our reality today means we will not be able to do so for a while, just as it has been difficult to import from Asian markets. We have also now sent our family of employees home to reduce the risk of infections and comply with the law as we all self-isolate in lockdown to fight the spread of the virus. Our consumers will of course be affected by these decisions, but we do encourage them to continue shopping online.”

While retailers that are deemed non-essential will temporarily halt operations, those that are essential (i.e. food supermarkets) need to apply stringent disinfection measures in brick‐and‐mortar stores to ensure a safe shopping environment. Online retailing or e-commerce elements for retailers thus become quite important from a customer visibility perspective, but the shutdown also has an impact on the delivery of goods to customers.

“The recent announcement of a lockdown meant that we consider a change in the way we do business to protect everyone. We are limited to working only online where consumers can shop everyday, all day, although we can only deliver after the ban on non-essential movement is lifted. It also means that we will not be able to do any maintenance and repairs as we comply with the law and help combat the spread of the virus," Hurvits said in a further response to the imminent national lockdown.

The coming period will be challenging to all businesses, large and small, and smaller retailers especially will need to be innovative in order to get back to trading when the fight against the virus is won. A new battle will begin after the pandemic is contained, and that is getting back to business, servicing backlogs, reaching customers, and doing so under strict health rules - a new way of doing things in the world. Remote shopping might become the order of the day after this ordeal. For now, stay home, wash hands regularly, and stay safe.



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