Grocery retailer Choppies expands into Mozambique, Namibia

SOUTH AFRICA – The Botswana based grocery retailer, Choppies Enterprises Ltd has started operations in Mozambique and Namibia, as it looks forward to expand its footprint into the rest of Africa.

According to Business Day, the retailer said it was gaining market share in South Africa where it has witnessed significant improvement especially in the North West stores which recorded 43% growth in revenue.

“This growth has brought us to profitability in this region and we expect this trend to continue in the second half of financial year 2018.

Segmental revenue increased by 43% and earnings before interest, tax, depreciation and amortisation (EBITDA) was up by 335% compared to the corresponding period,” the group said.

Choppies already operates in Kenya, South Africa, Botswana, Zambia, Zimbabwe and Tanzania and by the end of 2017; it opened 33 new stores to bring a total of 235 stores in Africa.

It reported a 22% increase in revenue to US$576.59 million and US$112.24 million gross profit, 23% high from its Botswana operations, which generates 40% of its revenue.

The company said despite the subdued economic environment in Botswana, they managed to maintain market share and continued to improve their efficiencies.

The retail market is being battled for by the likes of Pick n Pay, who in the recent past has turned its focus on home grown stores and franchises for its market outside South Africa.

Competition also comes from Shoprite, one of the retail giants looking into a strategic expansion into the rest of Africa.

It announced its share price rose a steep 25% on the JSE on Thursday to close at US$0.24.

Choppies added to its 71 retail chain in SA with a US$8.05m purchase deal for 8 additional stores at KwaZulu-Natal from Arizona Wholesalers and Butcheries in an attempt to achieve profitability in the country.

While overall performance had improved in the other regions, the company said Zimbabwe continued with encouraging improvement having grown 25% in revenue and 12% in EBITDA as compared to the previous year.

“The opening of new stores and distribution centres in other regions is in accordance with strategies adopted by the board.

In the six-month period, three stores were added in Zambia,” said the group.

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