South Africa’s retail giant, Shoprite, has hinted at a possible exit from the East African market on the grounds of unprofitability.
According to the firm, its operations outside South Africa only contribute 20% of its profit, with the other 80% of the earnings coming from South Africa.
Our focus is on ensuring stable returns so as to preserve our investors’ capital. Our next step, therefore, is to optimize existing investments. In 2019, the Group realized a trading loss in other African markets. The commodity price downturn has constrained economic growth, although our extensive store footprint and brand recognition positions us for strong longer-term performance.The East African quoted Pieter Engelbrecht, the Company’s Chief Executive Officer
This comes barely a week after the retail giant announced the closure of its The Waterfront, Karen outlet in Kenya, leaving it with only three functional outlets in the country; Garden City Mall, Westgate Mall, and Mombasa’s City Mall.
Shoprite already exited Mauritius last year, and Tanzania, two years ago, both on grounds of unprofitability.
In 2019, the retail giant closed the financial year with a KSh79 billion debt, including an 84 Million rands (KSh571) million loan from Stanbic Bank meant for expansion in Kenya.
The Shoprite Group of Companies is Africa’s largest food retailer. It operates more than 2,934 outlets in 15 countries across Africa and the Indian Ocean Islands. It is listed on the Johannesburg Stock Exchange (JSE), with secondary listings on both the Namibian and Zambian Stock Exchanges.