South Africa’s alcohol value chain has taken a severe beating during the Covid-19 pandemic, losing an estimated R36 billion in sales across the three alcohol bans imposed at different points of the national lockdown. A steep 8% rise in the excise tax is likely to add even more pain for companies involved in the alcohol supply chain, from glass manufacturers and distilleries to bars, restaurants and retailers.

“With alcohol trade restricted for around 20 weeks since the pandemic started, many taverns, bars, restaurants and bottle stores have struggled to survive or restore profitability,” says Steven Heilbron the CEO of the Connect Group. “As we look towards the Easter holidays and upcoming long weekends, many of these establishments are now asking what they can do to recover and grow again.”

Capital Connect, recognised hassle-free lender to SMEs, proposes that liquor traders consider four simple steps to maximise earning potential:

  1. Take stock

    Rising prices, diminishing incomes, and habits changed under lockdown might mean that customers are looking for different products and experiences at this point. Before you stock up, analyse how behaviours and preferences have changed in your customer base. For instance, now that they’re spending more time at home with direct family, are consumers buying different products than they would when they were socialising more? Know your customers and what they’ll be looking for.  Don’t risk losing out on what can be a lucrative sales season. 

  2. Buy in bulk

    This is a good time to buy in bulk and benefit from discounted prices on stock, especially with gluts of many products in parts of the supply chain. Purchasing in bulk may enable you to increase margins or launch specials and promotions to attract customers to spend more in your store.

  3. Secure cash flow

    Without cash, you cannot trade. Look for innovative solutions that help you alleviate cash flow pain points. For example, automated cash vaults can keep your cash secure, yet offer instant access to the cash they store. There are also alternative finance options, such as that offered by Capital Connect, that can give you quick access to  working  capital without the many hurdles and delays often associated with traditional bank loans.

  4. File UIF/TERS claims for employees that qualify

    The Unemployment Insurance Fund (UIF) is accepting applications for Covid-19 Temporary Employee/Employer Relief Scheme (TERS) benefits, for the period from 16 October to 31 December. These TERS payments will be paid to staff in sectors that were not able to operate fully due to lockdown restrictions, including the liquor industry. Remember to file applications for UIF-registered employees who couldn’t work during trade restrictions.

Heilbron concludes: “Liquor traders face a rocky road to recovery, but smart promotions and tight cash flow management can enable them to make the most of the upcoming holidays. Now is the time for retailers to ramp up trade, bring in revenue and maximise their earning potential, so that they can be in better shape to weather a third possible wave of infection in autumn or winter.”

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