For the most part, my mention of load shedding has been mainly inclined towards its effect on business productivity. The fact that the operating costs of most businesses have gone up due to the need to use generators for back-up power is one angle. The other angle brought about by increasing costs has been the need to hike prices which have led to customer inflows going down. The other angle has been the decline in productive capacity thus translating into decreased sales. Now you’re all aware that load shedding is still wreaking havoc and the end of it is nowhere in sight. There’s now a fresh headache that’s affecting most businesses. For a while, it’s been the supply side that’s been the major concern for load shedding. However, the demand side is now also in serious danger as will be seen in some examples I’ll cite herein.
Fresh In A Box
This is a business that specializes in the delivery of fresh vegetables and meat. They receive orders from clients through their online platform (WhatsApp) then they source the orders from their wide network of produce sellers. They are leveraging on the relative affordability and widespread use of WhatsApp. Essentially, one makes an order through their WhatsApp number and can make payments in Ecocash.
On the 9th of July the founder and owner of Fresh In A Box, Kuda Musasiwa, took to his Facebook page to express some disturbing developments for his business. He, first of all, indicated that it’s their policy to follow up on clients that would somehow have stopped doing business with them. This they do to find out and ascertain why those clients would have stopped placing orders. He narrated 3 stories of such clients from Avondale, Budiriro and Mt Pleasant.
I won’t detail the stories but I’ll draw key points from them to put his point into perspective.
The overarching insights from the stories are dual namely, people have stopped placing orders because they can’t properly keep the food frozen or chilled due to long load shedding hours. Secondly, the insinuation is that most people have stopped placing orders because due to the odd hours the electricity is available they now prefer buying ready to eat food rather than food that needs cooking.
He also pointed out that daily his business consumes at least 200 litres for deliveries and at least 20 litres of diesel for the generator. So already the operating costs have gone north and now this exodus of clients is further compounding the problems the business is already experiencing. He even admitted that he was at his wits’ end in trying to come up with a way to deal with the demand side problem that load shedding is now causing. He thus asked people to offer ideas they feel could help address the problem.
Fast Food Outlets
Not too long ago Simbisa Brands had to put in effect new operating hours due to load shedding. Simbisa Brands includes Chicken Inn, Pizza Inn, Creamy Inn, Bakers Inn, Steers, Haefelis and Creamy Inn. From Monday to Thursday they now operate from 1130hrs to 1430hrs and then 1730hrs to 2000hrs. From Friday to Sunday they now operate from 1030hrs to 1430hrs and then 1600hrs to 2100hrs. During these times they’ll be operating using a generator. So clearly that’s affecting their productivity and also raising their operating costs considering how difficult and expensive it is to get fuel. Over and above that, the demand side is now in serious jeopardy.
The normal framework for a fast food outlet is to be open and functional in such a way that you can walk-in any time you want. The fact that there are now timetables is leading to a situation where fewer customers are going to buy what they need. Recently I happened to be around a Chicken Inn outlet somewhere for a few hours. They opened at 1130hrs but I could literally count the number of customers who walked-in during the few hours I was there. There were also quite a number of people who came before 1130hrs and had to go away because they couldn’t wait. So overall, customer inflows are now waning and becoming erratic.
I’ve also noticed that this isn’t just the case for Simbisa Brands but for most fast food outlets. If electricity is unavailable throughout the normal working hours it means would-be customers will prefer to go to those who have alternative power. The sad thing is that most fast foods outlets are small to medium scale and can’t afford to run on back-up generators. It’s either they can’t afford to buy generators or they can’t afford to run for hours on them. This means that such businesses are most likely to suffer from the exodus of customers because they won’t be able to consistently and reliably offer their normal services.
The cold chain is critically important for meat farmers in order to preserve the meat as they secure consumers. The supply side is obviously being affected due to rising costs through the use of generators or having to keep livestock alive for longer as they look for customers (meaning more feeds). My parents do broiler chicken production and during their previous batch, they had challenges getting customers (which never used to be the case). The challenge is now compounded by people’s reluctance to buy meat because they can’t preserve it properly due to incessant power cuts.
These are just a few examples of how businesses have challenges both on the supply and demand side due to load shedding. As was apparent from Kuda Musasiwa’s example, finding a solution to this double jeopardy is really a catch-22 situation. What’s more perplexing is that there isn’t yet any long-lasting remedy for the power situation in sight. Ironically there has even been mention of possible ZESA tariff hikes.