Pep loses over 200,000 trading hours to load shedding "Pepkor says its performance has been negatively affected by the constrained consumer environment and persistent load shedding. In its interim results for the six months ended 31 March 2023, the group said its customers indicated that they have to prioritise spending on essentials, with high levels of inflation - particularly food and transport - hurting consumers' pockets. Moreover, its customers have struggled to earn an income due to disruptions in the grant payment system and the economic impact of load shedding. 

Due to load shedding, the group said that the number of trading hours lost to load shedding increased 500% during the period, rising to 211,000 hours. Although many of the group's stores could trade during load shedding, the inability of other retailers to do so hurt trading in shopping complexes. The group's diesel costs were close to R72 million over the period, and it said that it is implementing an initiative to mitigate the impact of the outages by increasing the proportion of the group's store base with alternative power sources to 74%. 

Moreover, the group is working with property owners to expand upon alternative power courses to address the trading hours issue. In terms of financials, the group's revenue grew by 4.3% to R43.8 billion. However, headline earnings per share decreased to 80.8 cents. As per Pepkor's historical dividend policy, no interim dividend was declared.  Fraser, L. (2023). Pep loses over 200,000 trading hours to load shedding. https://businesstech.co.za/news/finance/692423/pep-loses-over-200000-trading-hoursto-load-shedding/ (Retrieved May 31, 2023).

 

Making use of a local retailer (In South Africa) of your choice, critically examine and evaluate the impact of loadshedding on the financial performance and cash flow of its stores and profitability for the 2022/2023 financial year. 

Provide at least three suggestions as to how profitability can be improved or maintained. (40 marks)