Retail giant Shoprite, renowned for having established a trade presence in 14 African countries where others feared to tread is thinking of divesting from some of its footholds on the continent.
The news come after the company posted quarterly sales decline figures of 4.9%, translating into a profit plunge of around 20%.
One of the countries identified for underperforming sales is Nigeria where retaliation against recent xenophobic attacks in South Africa is said to be behind the chain store’s plummeting popularity.
Angola, where Shoprite has recorded a second year of poor sales following sharp depreciation of the local kwanza currency amid hyperinflationary market conditions, is also said to be in Shoprite’s cross hairs should it proceed to cull outlets.
But that decision, to slam the door on a country, would come as a last resort, said Christo Wiese, Shoprite’s biggest stakeholder.
Championed for the trade-store nous he has displayed since 1979 when he helped build Shoprite from six stores to well over a hundred, Wiese warned that Africa’s growth prospects remained muted and that it would be unwise to believe this situation would change anytime soon.
The 10.3% increase in Shoprite sales for the last three months in South Africa has thankfully helped to stem the fallout, but it won’t come as a surprise if stores in Angola, Nigeria, and possibly elsewhere on the continent are closed to curtail the kind of bleeding seen last year.
Underperformance back then resulted in trading losses of R265 million for the group.
