Battle for Africa’s consumers hots up

The gloves are off in the fight for hearts and wallets of consumers on the African continent, with Shoprite Checkers and the now merged Walmart- MassMart axis set to go head-to-head. Despite losses due to the strong rand, Shoprite Checkers, which has 16 stores throughout Africa, is gearing up to open new branches in Angola, Madagascar and Mozambique. WalMart- MassMart is in 14 African countries. On May 31 WalMart International CEO Doug McMillon, whose company paid R16.5 billion for a controlling stake in MassMart, said following approval of the merger the company would support the development of South African exports. “WalMart intends to provide Massmart with increased financial stability and support to continue strengthening its presence in Africa,” he said. However, trading in Africa is not for the faint-hearted. Shoprite Checkers sustained losses amounting to R43 million in December 2009 due to the exchange rate and R13 million in 2010 but does not view the currency woes as a deterrent to trading in Africa. The group is also planning to revamp three existing malls in Angola. “That we have become the market leader in food retailing in Africa is not due to a few individuals, but to the combined efforts of everyone who works in the Group. It has taken initiative, sacrifice, faith and sheer old-fashioned hard work to bring us to where we are today,” said Shoprite CEO Whitey Basson when the company’s interim results were announced. He admitted the 12-month trading period was the most difficult in his memory as a retailer. MassMart says it is the largest distributor of consumer goods in Africa, the leading retailer of general merchandise, liquor and home improvements and supplies, and the leading wholesaler of basic foods. However, it also took a knock because of the rand strength against the US dollar, reporting a foreign exchange translation loss of R79.5 million last year.