Earlier this year, Wunderman Thompson SA announced the appointment of Tshego Tshukutswane to its executive team as group chief strategy officer. Tshukutswane joined this month succeeding Moagi Bodibe, who has taken up independent consulting.ByJessica Tennant
While StatsSA's latest figures show retail trade falling 3.5% year-on-year from 2019 to 2020, continuing a 10-month downward spiral, South Africa's retailers are starting to show signs of adapting to the needs of the changing market.
South African small business owners are a resilient bunch; 86% of those recently surveyed by Retail Capital said that their business will survive the pandemic. This despite the majority not receiving relief from their landlords or financial institutions during lockdown. Most of them (73%) also did not earn an income as they (72%) could not trade.
The survey, which was conducted in October 2020, is based on hundreds of responses from business owners operating in industries including Food & Beverage, Building & Construction, General Retail and Hotels, Hospitality, Tourism and Travel. The majority (59%) have been in business for over three years.
“Despite all the odds, South African SMEs have shown their mettle and risen to the many challenges that the pandemic has thrown at them. They adapted to the situation and found solutions to their problems, in many cases creating opportunity out of adversity,” says Karl Westvig, Retail Capital CEO.
Business owners also showed their empathetic side; instead of retrenching staff (61%), they put them on short time or reduced salaries (66%), to help them earn some kind of living as the pandemic raged on.
Despite these humble efforts to try and protect their staff’s livelihoods, SMEs received little in the way of support. Of the 68% who have premises, only 34% enjoyed a rental holiday. This, coupled with a salary bill during a time of no income, put a serious strain on their savings and personal pockets.
When it came to financial support, the banks didn’t come to the party either; of the 44% of SMEs who applied for financing, only a dismal 16% received assistance. Similarly, while 47% applied for TERS, only 35% enjoyed some relief, and of the 18% who sought help from the South Africa Future Trust (SAFT), just 10% received any.
“It is astounding that, while our SMEs did everything they could to keep some sliver of light on in their business, the financial institutions who could have offered support, largely did not come through for them.
“For example, a customer of ours initially sought assistance from one of the big banks, to the value of R250k. While she was approved in writing, the money never arrived. After following up on numerous occasions, it turned out that her application had fallen through the administrative cracks. By the time it was discovered, the available funds had been exhausted. Fortunately SME funders have stepped up to the plate, and in our case, we have disbursed over R500m to our customers, since the start of lockdown. We also suspended all debit orders while our customers’ businesses were closed, only re-instating them when re-opened, to offer as much help as we could,” explains Westvig.
It's safe to say that many businesses are beginning to feel the effects of the Covid-19 pandemic...
1 Apr 2020
Despite these challenges, the survey’s SMEs are still upbeat and are looking at how they can unlock other business opportunities, turn their current operation on its head, and, as what must be the word of the year, pivot with a healthy 39% reporting that they have changed their business in some way since lockdown. Encouragingly, among those businesses that did close, 34% said they would open a new venture, and a whopping 75% reported learning something from lockdown that they will apply in their business going forward.
“While we are not out of the woods yet, all industries are up and running again. With some restrictions in place where necessary, and while practising Covid-19 regulations of sanitisation, social distancing and mask-wearing, most have resumed trade.”
“I am deeply proud of how far these SMEs have come. They have indeed shown that from adversity comes opportunity and when faced with what look like insurmountable challenges, they can be overcome by adopting a positive mindset and looking for ways to unlock opportunities,” concludes Westvig.
LEGAL DISCLAIMER: This Message Board accepts no liability of legal consequences that arise from the Message Boards (e.g. defamation, slander, or other such crimes). All posted messages are the sole property of their respective authors. The maintainer does retain the right to remove any message posts for whatever reasons. People that post messages to this forum are not to libel/slander nor in any other way depict a company, entity, individual(s), or service in a false light; should they do so, the legal consequences are theirs alone. Bizcommunity.com will disclose authors' IP addresses to authorities if compelled to do so by a court of law.