The Foschini Group (TFG) (TFGJ.J), a South African retailer, said Friday that power disruptions caused it to spend 200 million rands ($10.69 million) on alternative power sources, slowing shop openings.
The top three apparel retailers spent a record 3.1 billion rand on online expansion and high-growth outlets in fiscal 2023.
Africa’s most developed economy is experiencing its worst rolling blackouts, leaving people and companies without power for 10 hours daily.
Retailers’ margins have suffered as inflation and rising interest rates reduce discretionary spending.
TFG said the year-through-March 31 investment on alternate power alternatives to keep the lights on was unplanned.
TFG CEO Anthony Thunström told Reuters that 90% of the 318 African stores opened in the fiscal year were opened before rolling blackouts increased in December 2022.
“Rushing in to do them until loadshedding kind of eases… doesn’t make a lot of sense,” he said, referring to the rolling blackouts. The group has over 1,000 businesses to add.
“TFG’s future brand and store roll-out pipeline remains as robust as ever, however, current market conditions require a slower execution timeline of this roll-out,” the company stated.
Thunström repeated that rolling blackouts might have cost the company’s Africa operations more than 1.5 billion rands.
On Friday, the South African-UK-Australian corporation reported a 4% drop in fiscal year profit. The stock rose 3% to 292 cents in the afternoon session.
