An additional 133 businesses have been liquidated in South Africa
The closure of an additional 133 businesses in South Africa has increased the total number of liquidated companies to 892 for 2024.
In July 2024, South Africa saw 133 businesses go into liquidation, raising the total number of liquidated companies and close corporations for the year to 892.
In which industries are most liquidations?
According to Business Tech, the majority of business liquidations in July were in the financing, insurance, real estate, and business services sectors. This trend has been consistent throughout the year and is also evident in the year-to-date figures.
The second hardest-hit sector is the trade, catering, and accommodation sector. Outside of the ‘unclassified’ category, these are the only two sectors to see double-digit liquidations in July and triple-digit liquidations year-to-date.
Pick n Pay shutting down stores
Pick n Pay, one of South Africa’s leading retail chains, has recently released a trading statement highlighting a troubling period of stagnant growth and store closures. The company has started closing some stores as part of a plan to close or rebrand around 100 outlets.
The company stated that its company-owned supermarkets, which contribute most to the group’s reported sales, have significantly underperformed in recent years. As a result, these closures are part of the broader business strategy.
What is the situation in comparison to last year?
On a positive note, there has been a decline in liquidations in comparison to last year. However, there are still a few months left in 2024.
Year-on-year, liquidations for July were down 5% in comparison to 2023. The running three-month period between May and July also saw an improvement, with liquidations down 9.5%.
Liquidations: Impact on employment
Businesses closing in South Africa directly impacts employment rates. As it stands, South Africa has alarmingly high unemployment rates.
The Eastern Cape and North West have the highest unemployment rates in the country. Markedly, the Western Cape and Gauteng have experienced the largest increase in unemployment. In these two provinces unemployment has quadrupled since 1994, according to Business Tech.
South Africa’s unemployment rate trended upward in the second quarter of 2024.
The Mail and Guardian reported that unemployment increased to 33.5% in the period April to June, rising for the third consecutive quarter and reaching its highest rate in two years.