Choppies to exit Zimbabwe market with sale of subsidiary, Nanavac (Pty) Ltd

ZIMBABWE – Leading grocery retailer Choppies Enterprises Limited plans to exit Zimbabwe, citing competition from the informal sector among other reasons.

In Zimbabwe, Choppies operates under its wholly owned subsidiary, Nanavac (Pty) Ltd, owning 30 grocery retail stores across the country.

While Choppies has not yet revealed the identity of the potential buyer or the sale price, analysts believe the deal could attract interest from local players eager to expand their presence in Zimbabwe’s retail sector.

“The board of directors of Choppies (“Board”) hereby advises all shareholders that the Company has entered into discussions regarding a possible sale of the business operations of Nanavac (Pty) Ltd trading as Choppies Zimbabwe for cash (“Possible Sale”), which, if successfully concluded, could have an impact on the Company’s share price,” said the company.

The retailer added that the possible sale, which is subject to certain conditions and regulatory approval, is aligned with the strategic intent of Choppies to focus on profitable retail.

While the company expressed optimism about Zimbabwe’s long-term economic viability, it noted that continuing operations in the country would require substantial additional capital.

Choppies has already made significant investments to sustain its Zimbabwean operations but acknowledged the challenges of prolonged financial support.

“In Zimbabwe, over the last two years, there has been a significant shift to the informal retail sector, leaving the formal retail sector to battle a reduction of up to 30% in footfall and having to compete with the informal sector,” the retailer explained.

While the formal shops are obliged to follow scrupulous business conduct with heavy penalties hanging above their heads for malpractices, the corner shops are often let off the hook, allowing them to charge their goods in hard currency.

Grocery vendors likewise have emerged as another layer of competition and are found on city pavements, including on supermarket verandas.

Choppies added in its statement, “While we believe in the country’s long-term viability, Choppies as a group needs more capital to support its Zimbabwean operations for extended periods and has already invested significant capital to support the operations.”

Choppies said in its annual report for the period ended June 30, 2024, that the new ZiG currency, which replaced the Zimbabwean dollar, did not help to stabilize the economy, and consequently, the Zimbabwean operation has experienced a decline in performance.

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