BOTSWANA HEADQUARTERED retailer, Choppies Enterprise Limited, will exit the Zimbabwean market amid a deteriorating environment which has seen a surge in the informal sector leaving the formal retailers to battle for crumbs.
As first reported by NewsDay Business in October, the retailer had been mulling an exit from the local market due to an unfavourable economic environment.
In cautionary statement on Friday last week, Choppies revealed that there has been a significant shift to the informal retail sector over the past two years, leaving the formal retail sector to “battle a reduction of up to 30% in footfall and having to compete with the informal sector”.
“While we believe in the country’s long-term viability, Choppies as a group needs more capital to support its Zimbabwean operations for extended periods and has already invested significant capital to support the operations. Due to the factors mentioned above, we have decided to exit the country,” it said, adding that it had entered into discussions regarding a possible sale of the business operations of Nanavac (Pty) Ltd trading as Choppies Zimbabwe for cash. The possible sale is subject to certain conditions and regulatory approval and is aligned to the strategic intent of Choppies to focus on profitable retail, the retailer said.
Choppies has a 100% stake in Nanavac Investments (Pvt) Limited trading as Choppies Zimbabwe.
In October, the group revealed that the economic headminds in Zimbabwe, including high inflation, high unemployment levels and a shortage of foreign currency, were impacting its operations.
Locally, Choppies has 30 stores and employs 1 051 (567 male and 484 female), who could end up losing their jobs if the retailer pulls out of the country.
South African retailer, Pick n Pay Group Limited, in October recorded the value of its investment in TM Supermarkets (Pvt) Limited to zero.
Pick n Pay operates in Zimbabwe through a partnership with TM, the retail subsidiary of Meikles Limited, in which the group has a 49% investment in the supermarket.
The partnership has 74 stores across the country.
