Shoprite Holdings, South Africa's largest supermarket chain, has almost completed the consolidation of its operations across Africa, but Mozambique is on the list of countries that might be reviewed, its CEO told Reuters on Tuesday.
The retailer had expanded extensively in Africa, surpassing rivals such as Pick n Pay and Walmart-owned Massmart to become the continent's leading food retailer in about 15 countries.
But over the last five years it has been reviewing its long-term options across Africa as currency volatility, lower commodity prices, high inflation, import duties and dollar-based rentals have hit household incomes and weighed on earnings. In August, it announced plans to exit Ghana and Malawi, after other exits from Nigeria, Kenya, Democratic Republic of Congo, Uganda and Madagascar.
Its business in the rest of Africa is now made up of 268 stores across seven countries, all of which are Sadc members.
Asked if the retailer's consolidation plan was now complete, Pieter Engelbrecht, the group CEO, told Reuters, “pretty much so. The one that's on the watch list is Mozambique ... we have got a very high alert in terms of what do we do.
“The biggest concern or disappointment is that we're not getting that gas business off the ground, and now we've got that whole Isis thing up north there in Palma and the project was planned to be reignited in June and it's not happening now. Without that, Mozambique is in serious trouble.”
Engelbrecht was referring to Islamist insurgent attacks in the port city of Palma in March 2021, which killed many civilians in areas surrounding Mozambican LNG infrastructure projects and brought a multibillion-dollar liquefied natural gas project by France's TotalEnergies to a halt. The force majeure, in place since 2021, is expected to be lifted soon, according to TotalEnergies and Mozambique President Daniel Chapo.
“Africa has become the story of currency devaluations and high inflation. Some difficult monetary and fiscal policy stuff. So for the moment, I don't see any green shoots for entering a new one [country],” he said.
If Shoprite changes its strategy again and expands outside South Africa, it will do so with a different model, he added.
Reuters
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