The Challenges faced by Essential Services Providers

During this Lockdown began on 27 March 2020 as a national strategy to successfully curb the rapid and possibly deadly and uncontrollable spread of the Corona Virus pandemic some essential services and goods business have remained open for service and trading, for example, financial services, food stores/supermarkets/spazas, transport and petroleum garages. Of late, midway through the lockdown informal trades of fresh produce were granted trading permits and subsequently from Saturday, 18 April 2020 hardware stores for the benefit of essential artisan services such as plumbing, motor-mechanics and spares, etcetera were allowed to re-open their doors.

At face value it seems that these businesses are okay. But upon investigation it’s revealed that alas! even for them the financial pitch of the Lockdown exists in many cases. In this instance at a particular local fuel station, the revenue taking is down to 20 % meaning that 80 % of 100 % normal revenue before the lockdown is lost as fewer motor-vehicles visit the station pumping less liters of petrol and diesel since most residents are at home during the lockdown. 

However, for most of these businesses even if earnings have dropped that drastically, they must continue working to keep on earning what they can with less sales as such disasters for example Covid19 unlike natural disasters like hail storms, flooding and fire that can be insured. A filling station manager lamented that, “if there had been an insurance none of us would be open”.

This sentiment of reduced earnings due to less clientele is similar to the business experience expressed by the recently opened fresh produce informal traders. In addition to lower margins, they also mentioned the reality of increased prices from the supplier, the municipal Fresh Produce Market. Furthermore, some stock shortages lead to traders entertaining the idea of finding alternative fresh produce suppliers. In spite of these challenges they still maintain consumer friendly profit margins to keep their stock supplies going.

Government relief programs for struggling and vulnerable SMMEs including those with challenges in society during the Codiv19 pandemic announced by the State President, Mr Cyril Ramaphosa couldn’t be more appropriate to help ease the constrains.

However for most of the essential service and essential products providers as tenants of property owners belonging to the newly formed Property Industry Group, who being an amalgamation of various major national property owner groups including SA Council of Shopping Centers (SACSC) together with SA REIT and SAPOA are being called to deal with the impact of Codiv19 pandemic concerning their businesses and that of their tenants, who in turn can look forward to some relief from rental obligations until such a time that the lockdown is lifted.

The Property Industry Group has provided for some relief measures for its retail tenants mainly for SMMEs but also for large business tenants depending on their revenue takings during the lockdown; the revenue takings also linked to the ratio of essential services goods that make up normal business sales of the business. Job preservation is the objective target of this initiative by the landlords for their retail tenants, their suppliers and service providers. These measures are also initiated to help avoid evictions. For tenants in industrial, office space and hospitality industry relief will be handled on a case-by-case basis. The condition for all potential beneficiaries of their various suitable packages is that they must have been in good standing with their landlords as of Saturday, 29 February 2020.

Dumi Mkhabela Soweto Sunrise News

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