Leading Fast Moving Consumer Goods (FMCG) retailer Choppies Enterprise Limited plans to roll out at least 20 more stores in all regions by the end of the 2017 Financial Year. The dual-listed company made the announcement in its latest annual report where it declared that it was on course to exceed its 200 stores target by end of this year. The company now projects to deliver 204 stores. As at October 2016, Choppies had 192 stores after making massive acquisitions in several markets during the ended financial year including in new markets such as Zambia, Kenya and Tanzania where it has a total of 17 stores in those countries. The group is addition looking into the Namibian market where it expects to open a store very soon. The Namibian market is considered to be similar to that of Botswana in terms of population size and with towns located far apart.
The group says the Namibian economy is amongst the best performing and most stable economies in Africa and should provide it with a steady growth market on a long-term basis. “Namibia’s proximity to our Botswana and South Africa markets will allow us to leverage our existing infrastructure alongside outsourced distribution. A joint venture agreement has been concluded for Namibia,” group chief executive officer Ramachandran Ottapathu said. A joint agreement in Mozambique has been signed as well with a new store in that country expected to be up and running by mid on November this year. In the markets that the group is already operating in, the group remains the market leader in Botswana where it currently enjoys about 60 percent of the market. “As with the rest of the world, we have seen increasing macroeconomic headwinds in the country and the deflationary effect of the Rand devaluation continued in the year,” Ottapathu said on the Botswana market.
The group continues to face headwinds in the South African market where most of its stores are located in the mining towns which have been affected by strikes, resulting in reduced employment levels. “However, despite these challenges, gross profit margins in South Africa remained strong in the year. As in Botswana, consumers have switched to lower cost, high volume products but the basket size has increased,” Ottapathu said. During the 2016 financial year, Choppies expanded its South African footprint with the acquisition of 21 Jwayelani stores located in Kwazulu-Natal and Eastern Cape. It says more stores are in the pipeline in the South African market before end of 2016.
The Zimbabwean market where Choppies has struggled with profits due to the economic environment of the country is said to be still significantly underpenetrated in terms of formal retail with competition from informal trade intensifying on the other hand. There are currently 30 Choppies stores in Zimbabwe and the group intends to add two more before the year ends.