Despite the downward shift in consumption patterns in South African mining towns- where trading conditions are challenging-which negatively impacted profit margins, Choppies Enterprise Limited is on course to deliver 200 stores in six markets by end of the 2016, group Chief Executive Officer (CEO) Ramachandran Ottapathu said on Tuesday. Presenting Choppies half year results on Tuesday, Ottapathu said they still aim to maintain and grow their profitability. During the period under review, Choppies revenue grew by 17 percent to P3.5 billion while gross profit increased by 11 percent to P714 million.
As at December 31 2015, Choppies had 147 stores across four countries, but the number is expected to increase once the acquisition process of 10 existing stores is completed in Kenya, a process which is expected to be completed by end of March this year. The Botswana market in which Choppies has 79 stores, including those opened after the period under review closed, contributed 64 percent of the group’s total revenues.
In South Africa where trading conditions are said to be challenging, particularly in mining towns, downward shifts in consumptions are believed to have negatively impacted gross profit margins. During the half year, Choppies opened four new stores in South Africa taking total number of stores in the country to 40. Choppies further acquired 21 stores in kwa-Zulu Natal and Eastern Cape provinces post the end of the financial period.
The Zimbabwean market where Choppies operates 28 stores, with eight of those having been opened during the period under review, a 49 percent growth in revenue is said to have been achieved over the first six months of the previous financial year. However, aggressive pricing and promotions strategy in new stores and start-up costs for eight new stores opened during the period. Late last year, Choppies entered the Zambian market where it currently operates one store while a further 10 are planned for the 2016 calendar year.