South African businesses are assessing the impact of protests held on 30 June, with analysts saying companies linked to the informal economy experienced some of the biggest disruptions.
JSE-listed AVI said sales in the quarter ended June were “materially impacted” by the threat of unrest surrounding the national protest action led by March and March.
“The last quarter’s sales were substantially impacted by lower demand from distributors and wholesale customers who delayed purchases due to the threat of unrest surrounding the 30 June national protest action,” AVI said.
Sun International said the protests also affected gross gaming revenue in the six months to June. Sun Slots reported a marginal 0.4% decline in income to R698 million, partly because some venues were disrupted or forced to close.
Ernst Biljon, supply-chain management coordinator at the IMM Graduate School, said the disruption was uneven across provinces and sectors.
“Gauteng and KwaZulu-Natal carried more of the acute, visible disruption, with protest activity, road closures and heightened security concentrated there. Businesses across freight, logistics and retail pre-emptively rerouted deliveries, delayed non-essential travel and withdrew staff from identified protest routes, whether or not a single shop window was broken,” Biljon said.
Businesses therefore had to factor uncertainty and potential disruption into their operations around 30 June.
The protests followed calls by civic groups, including Concerned Citizens and Voters of South Africa, for a national shutdown under the slogan “Send the foreigners home”. Some anti-immigration activists had set 30 June as an unofficial deadline for undocumented migrants to leave South Africa.
Demonstrations had taken place in several cities during the preceding weeks, including Johannesburg, Pretoria, Durban, Cape Town and parts of the Eastern Cape. Foreign-owned shops and vehicles were set alight in some areas, while other businesses closed temporarily amid fears of looting.
On 20 May, Human Rights Watch reported that vigilantes had carried out violent attacks against African and Asian foreign nationals, including shop owners who were beaten, pepper-sprayed and assaulted.
The New Humanitarian reported that during the May June period more than 160,000 people were helped home by their governments. Yet more returned privately, sent back just wives and children, or relocated to safer parts of the country.
Sean Culverwell, an investment analyst at Anchor Capital, said there was no credible aggregate estimate of the protests’ cost to the South African economy.
“For Sun International, the financial impact appears to have been limited largely to its Slots business. This is primarily a function of location and customer exposure,” he said.
Sun Slots had greater exposure to the informal economy, with limited-payout machines installed in taverns and informal restaurants. Some of these venues were forced to close or reduce their operating hours, temporarily affecting trading activity.
“AVI was affected in a similar way. Several of its food, beverage and personal-care products are distributed through both formal and informal retail channels in areas that experienced disruption. AVI indicated that approximately R91 million in sales were affected as distributors and wholesale customers delayed orders ahead of the anticipated 30 June unrest,” Culverwell said.
However, the R91m represented affected sales, not an equivalent loss of profit.
“The broader takeaway is that the impact was concentrated in businesses with greater exposure to the informal economy and affected distribution channels, rather than representing a uniform shock across the listed corporate sector,” Culverwell said.
During the May June period unofficial deadlines and threats forced many immigrant-run corner shops and informal stalls to shut down, creating commercial voids and leaving some local residents with no choice but to travel further for goods.
Bigger retail operations faced operational hurdles as many delivery staff stayed away or were affected by the unrest. The were also deserted market stalls and shopping areas over the period that previously relied on immigrant-operated businesses.
THE NATIONAL