The Consumer Goods Council of South Africa (CGCSA) and the Liquor Traders Association of South Africa (LTASA) have published a new report on the impact of the government’s Covid-19 regulations on the liquor industry with the groups warning that continued restrictions will lead to thousands of job losses.
Under the current level 3 restrictions, liquor sales are only permitted a four-day trading period for off-site consumption sales and permitted on-site consumption establishments to trade seven days a week.
A study, conducted by independent research company Ipsos, found that at least 67% of respondents interviewed predicted business closure should the restrictions continue, with a 35% risk of closing in less than three months and another 25% in six months or more. Several business indicated that they could only operate for another month should the current situation continue.
The collected data shows that nearly 3 000 jobs have already been lost across over 1 400 independently owned liquor stores, with that sector employing over 14 000 people.
“With each store on average employing five people – excluding service providers’ employees, such as merchandisers, security workers and cleaners – these are at real risk of losing jobs with devastating consequences. Given the impact of the severity of the lockdowns so far, and considering that some retailers may need at least six months to fully recover from successive lockdowns, further retrenchments cannot be ruled out.”
The study shows that liquor retailers have lost about 50% of the revenue they should have earned from Thursday to Saturday, yet overhead costs remain unchanged.
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