‘If CT stores receive a new shipment of water bottles, it is sold within the hour’
The price of bottled water is spiking in the Mother City
Cape Town’s water shortages are top of the agenda in retail boardrooms as demand for bottled water and other items soars.
Viccy Baker, founder of Retail Price House, which surveys prices across all retail chains, said last week: “If Cape Town stores receive a shipment, it is sold out within an hour.”
One retailer had told her “the [water] issue is pretty much the only topic under discussion in every department right now”.
So far, most stores in Cape Town had kept bottled water prices on par with the rest of the country, she said. “One can only hope and assume that the major fresh water suppliers are also holding their prices to the retailers. The biggest issue is supply, as without exception the retailers cannot keep up with demand.”A five-litre bottle of water retails for about R15.49, depending on the brand, but Baker said some forecourt stores were charging R31.90. “A school which tried to buy 1,000 five-litre bottles from wholesale supplier AquaV was quoted R28 a bottle — double the price that AquaV is selling in Gauteng,” she added.
AquaV founder Nigel Price denied Baker’s claim. He said the company had four independent mineral water suppliers or bottlers. “During the course of the drought these independent bottlers are sending their own five-litre brands to Cape Town which we are currently being offered at R23.50 for a minimum order of 50 x five litres delivered to your door.”
David North, group executive for strategy and corporate affairs at Pick n Pay, said the company had not raised bottled water prices. “However, we have discontinued promotions on buying water in bulk as part of our measures to ensure that as many customers as possible can buy some bottled water at the present time.”Cape Town’s demand for water and water containers had outstripped any other region in the past few weeks, he said. “We and every other retailer were not able to supply that demand.
“The main currency of water in Cape Town at the moment is five-litre bottles and those basically run out very quickly. In practice, we ramped up our stock by about 400% and I don’t know how much we [should] put in our stores for it not to sell out. All of it has sold out.”
Pick n Pay had focused on reducing its own water consumption, said North, and Woolworths is harvesting rainwater at many stores countrywide. Shoprite has installed water tanks at Western Cape supermarkets and has boreholes at various sites, including distribution centres, to reduce its reliance on municipal water.
Water restrictions have also forced manufacturers such as Pioneer Foods and Rhodes Food Group to rethink their water use, but both companies ruled out the possibility of certain products running out.
Pioneer CEO Tertius Carstens said the manufacturer, whose brands include Ceres and Liquifruit, saw little risk of operations being disrupted by the drought.
“However, if the situation worsens to such a point that our plans and mitigations are not able to ensure business continuity, we have undertaken to engage with our customers as soon as warranted.
“Our suppliers of ingredients, packaging material and services are currently confident that they will sustain supplies.”
Rhodes, however, which relies on Western Cape farmers for fruit, said the drought and water restrictions posed “a serious challenge”.Adrian Cloete, portfolio manager at PSG Wealth, said big food manufacturers had countrywide operations, limiting the impact of the drought on their overall results. “The drought situation in the Western Cape is unlikely to have any bearing on investors’ appetite for food manufacturers,” he said.
Euromonitor International’s research manager, Thomas Verryn, said there had been a noticeable increase in demand for products such as waterless hand-sanitiser and paper tableware, and retailers were struggling to keep up with demand.