Shoprite continues to narrow focus on outside markets, mull exit from DRC

DRC – Shoprite, Africa’s largest supermarket retailer, has decided to shut its operations in Democratic Republic of Congo.

The decision follows its exit from Nigeria, Kenya, Uganda and Madagascar as the group aims to focus more on its business in its home-market South Africa.

The company said after the sale of its Nigerian unit last year to Ketron Investment Limited, a company owned by a group of institutional investors led by property firm owner, Persianas Investment Limited, that it was changing its model from an ownership to a franchise one after a review of its long-term options in Africa.

This was informed by its expansion plans been hit by currency volatility, double-digit inflation, high import duties and dollar-based rentals.

“The decision to close operations in the Democratic Republic of Congo during this period is regrettable but is part of the group’s long-term strategy,” Shoprite said on a statement.

South Africa’s biggest retailer by market capitalisation launched in DRC in 2012 during a period of aggressive expansion push into African’s frontier retail markets.

Its three shops in the Eastern African country were among its over 2,400 stores across 11 countries in Africa including South Africa, Angola, Botswana, Eswatini, Ghana, Lesotho, Malawi, Mozambique, Namibia and Zambia.

In a trading update for its first quarter ended September 2022, the Group’s core Supermarkets RSA segment, represented by Shoprite, Usave, Checkers, Checkers Hyper and LiquorShop grew sales for the first quarter by 19.9%.

This growth in sales was achieved by a healthy mix of increased customers, volume growth and higher average basket spend. Internal selling price inflation for the first quarter measured 8.2%.

According to the report, market share gains over the first quarter measured 1.4% versus the first quarter 2022, extending the period of uninterrupted market share gains in our core South African supermarket business to 43 months.

Meanwhile, its Non-RSA operations, increased sale of merchandise for the first quarter by 18.8% in Rand terms.

While this reported growth was supported by local currency strength versus the Rand in key markets where it operates, the segment furthermore reported an increase in sales on a constant currency basis.

Its Other operating segments, made up of OK Franchise, Transpharm and Medirite Pharmacies, as well as Checkers Food Services, reported a 10.8% increase in sales.

In pursuit to grow its share in South Africa’s retail sector, Shoprite is still eyeing acquisition of Cambridge Food, Massfresh as well as Masscash Cash and Carry from sector peer Massmart.

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