One of the key components of someone’s risk of poverty is their location. Regarding many aspects of life, location is everything, especially when it comes to the accessibility to food resources. A food desert is an area in which someone does not have close access to a food source, such as a supermarket. In urban areas, the US Department of Agriculture considers a food desert an area with no ready access to a store with fresh and nutritious food options within one mile. In rural America, a food desert is defined as 10 miles or more from the nearest market. Unfortunately, food deserts are not few and far between – “it’s estimated there are more than 23 million people, more than half of them low-income, live in food deserts”.
- Walmart operates more than 10 500 stores and clubs in 20 countries and eCommerce websites. This compares with the approximately 3 000 stores of Shoprite Checkers in South Africa. At the end of 2023, Walmart employed about 2.1 million associates worldwide, with approximately 1.6 million associates in the US. This number compares to the Shoprite Checkers number of employees of 152 000. In 2016, Walmart said that they would be closing 269 stores worldwide, a move that impacted the jobs of around 16 000 people. The real reason behind the closures of Walmart stores across the US is that they are grappling with an uptick in shoplifting that could lead to higher prices and closed stores if the problem persists. Walmart CEO Doug McMillon said: “Theft is an issue. It is higher than what it has historically been.” Walmart is not the only big-box retailer dealing with an uptick in theft. Target financial officer Michael Fiddelke said shoplifting has jumped about 50% year-on-year leading to more than $400 million in losses in this fiscal year alone. He said most of the shoplifting is organised retail theft, rather than petty theft. After the stores close, the buildings are abandoned and nobody attempts to trade there again. (If Walmart cannot make it there, why would anyone else be able to make it work?) This approach is illustrated by recent news reports of an announcement by a large US insurance company: “A major insurance provider is leaving Florida in the middle of hurricane season. Farmers Insurance recently announced that it would discontinue its coverage for cars and homes across the state to ‘effectively manage risk exposure’.”
- The ugly truth that is playing out in the US is an early warning signal to South Africa, with even greater dangers facing us. To begin with, if we were to define food deserts in South Africa on similar criteria as the US it would be easier to just state where there were no food deserts. The root cause is that lawlessness has reached epidemic proportions. This is exacerbated by a lack of crime intelligence and ineffective prosecution of the ring leaders of organised crime. The government has left it extremely late and is soft and ineffective on criminals. During July 2021, South Africa experienced violent protests and socio-political unrest characterised by widespread looting of shops and businesses, as well as burning and destruction of public facilities and private properties, mostly in the provinces of KwaZulu-Natal and Gauteng. More than 350 people died during the unrest. The South African Property Owners’ Association (Sapoa) reported that 3 000 stores were looted and 1 199 retail stores were damaged during the protests, including large outlets and businesses. A total of 161 malls were damaged countrywide, while 161 liquor outlets and distributors, 11 warehouses, and eight factories were extensively damaged. Banking services were affected, as most banks in KZN and Gauteng closed their branches. In total, an estimated 40 000 businesses and 50 000 informal traders were negatively affected, with 150 000 jobs put at risk, mostly due to business closures and the possibilities of delayed re-stocking and re-opening. On a national scale, Sapoa estimated that the extent of damage was worth R50 billion. The KZN province lost R20 billion, and in Durban alone, R1.5 billion of stock was lost by businesses. Large supermarket groups and wholesalers were targeted and affected.
- Following the 2021 social unrest there was a spate of truck attacks this year. Police minister Bheki Cele said there was a possibility that the truck burnings were economic sabotage against South Africans. More than 21 trucks were recently torched at strategic routes, creating havoc with traffic delays and uncertainty of deliveries and increasing concerns regarding the cost of doing business and the risks associated with our logistic solutions. “These are the work of organised and sophisticated operations” according to Cele.
- Mafias are hijacking construction sites across South Africa, costing the economy billions. Speaking at the Big Five Africa Construction Summit in Midrand in June, public works minister Sihle Zikwalala said that construction mafias had been a nightmare for construction companies that want to finish projects. As things stand, the Preferential Procurement Regulations state that any project valued over R50 million should allocate 30% of its funds to “local input.” The spokesperson said this requirement has been misunderstood by construction companies, who believe it obliges hiring individuals from the project’s immediate community. Zikalala said that, according to pre-pandemic data, backlogs and hindrances on construction sites because of mafias have cost the economy more than R68 billion across 186 projects.
- Populist politics is shaking the world. A common thread of all these populist movements is the notion that mainstream politicians, business leaders and media figures cocooned in big cities have let the rest of their countries down and lost interest in “left behind” places and people. These populist revolts against dynamic cities are rooted in real grievances based on stagnating wages and soaring inequality. The South African urbanisation number is 67% against the world average of 56%. Capital does not flow where uncertainty and risk gets the upper hand over the law of the land, where theft and destruction destroy the arduous work and livelihoods of law-abiding citizens. The electorate will not vote for an ineffective government that does not protect their rights to ensure a just and fair society where all can prosper. After the 2021 destruction most stores reopened. Should such a tragedy be repeated, expect a lot fewer stores to re-open – a breeding ground for food deserts. The US insurance company withdrawal from Florida is proof thereof.
Corrie Kruger is an independent analyst.
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