Choppies to spend US$3m on new stores in Kenya and Tanzania

KENYA – The Botswana retailer and supermarket Choppies has unveiled plans to invest US$3 million in it’s a new regional expansion strategy with two stores in Kenya and another one in Tanzania this year, reports theEastAfrican.

The Kenyan stores will attract US$2.37 million while US$700,000 for the Tanzanian store, one the company stated would be the biggest in the country.

“This will record good volumes, as it will be the biggest Choppies retail outlet in Tanzania.

Retail site development is generally slow in Tanzania, and we expect to grow at a slow pace in this market,” a Choppies statement said.

Despite of a struggling retail sector, the Botswanan chain Choppies announced a store network expansion in Kenya with an approximately US$19.4m commitment to open 22 new stores in the country.

Choppies entered the Kenyan market to replace the struggling Nakumatt, up to recently one of the leading retailers in East Africa through the acquisition of debt-ridden retailer Ukwala.

The turmoil in Kenya’s big retail chains including Uchumi and Tuskys has been characterized by longstanding debt crisis, with multiple outlet closures, stock disruptions and supplier deals falling through, giving a spirited entry into Kenya by multinational chain stores.

News have it that Choppies opened a new store at South Field Mall and plans to open another one in Kiambu Mall bringing its total number of stores to 12, both in Kenya and Tanzania.

It is also on the verge of taking up spaces owned by Nakumatt even as it delivers on a plan it announced March last year to refurbish eight branches of Ukwala Supermarkets it acquired with US$2.5 million in funding.

“The planned revamp of stores taken over from Ukwala has started, and we expect to finish renovations by end of July. The market is ripe for a turnaround, and we are hopeful that this will pay off,” said Choppies.

It completed the US$10 million Ukwala acquisition in December 2016 to get a controlling stake, with the remaining 25 per cent equity being held by Export Trading Group, a Tanzanian firm.

In its half year results it announced in November 2017, chief executive Ramachandran Ottapathu said although Choppies was still operating below break-even in the two countries, Kenya contributed 3.4% of its revenues while Tanzania brought in 0.1%.

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