Lewis blames Transnet for port container backlog

Furniture and appliances retail group Lewis has more than five to six times the number of shipping containers with stock waiting to come in on ships outside local ports than normal at the beginning of December. This is because of the backlog caused by problems at Transnet.

“If we look at the situation this morning, then the Lewis Group is sitting with 290 shipping containers that need to come in,” group CEO Johan Enslin said on Thursday in an interview with Business Day.

“To put that in perspective, in other years we have 40 to 50 shipping containers that are outstanding which usually come in during the first week of December,” he said.

What is happening at the Durban port is a “catastrophe”.

The group has joined the rising chorus of companies, such as Pepkor and Mr Price, frustrated by these holdups, particularly in Durban. Business Day recently reported that some retailers have taken to flying in lighter goods, such as clothes, at high cost to ensure they have enough stock ahead of the festive season.

This compounds the decline of Transnet’s local railways, which has led to more companies using road transport to send and receive goods.

According to Enslin, over the past six months 86% of goods were moved from Durban to Johannesburg using road transport compared with 15%-20% when the rail route was fully functional.

But he was quick to point out that Lewis does have sufficient stock for December, January and February.

Meanwhile, consumers’ struggle with high inflation, elevated interest rates and myriad other issues was reflected in the

Lewis Group reporting more credit and fewer cash sales on Thursday in its results for the six months to end-September.

“Consumer spending will remain depressed in the months ahead due to increasing economic pressures, while loadshedding and congestion at the local ports are likely to continue to negatively impact economic growth,” the company said. “The consumer demand for credit is expected to continue.”

The group, founded in Cape Town in 1934 and valued at about R2.1bn on the JSE, also reported that its debtors book grew 10.8% as credit sales went up 19.5%.

The contribution of credit sales to total merchandise sales rose 7.9 percentage points to 64.4%, and cash sales fell 14.4%.

The number of accounts paid improved by 1.1 percentage points to 79.9%, while the collection rate was 0.8 percentage points lower at 80.9%.

The group has maintained its strict criteria in granting credit, helping to attract lower-risk credit customers as the application decline rate went down one percentage point to 34.8%.

Total revenue from the various brands, which include Beares, UFO and Best Home & Electric, increased 8.3% to R3.8bn, including the 4.8% rise in merchandise sales to R2.2bn. Operating profit advanced 7.5% to R309.3m.

But profit fell 6.2% to R194.8m and headline earnings per share (Heps), a common profit measure in SA that excludes certain items, 6.6% to 372c.

The company declared an interim dividend of 200c per share, a 2.6% increase.