Shoprite ramps up African expansion with 47 shops

Shoprite, Africa’s biggest grocer, is ramping up its expansion across the continent with 47 new supermarkets as its core South African consumer base grapples with high personal debt levels and growing fuel and transport costs.

Nearly half of South Africans failed to pay back their debts for three straight months this year, prompting banks to tighten their lending criteria, while a weaker rand currency fuelled inflation and higher petrol prices.
“It’s tough out there,” Shoprite deputy managing director Carel Goosen said at the presentation of the company’s full-year results.
Cape Town-based Shoprite, which reported an 11 percent rise in full-year profit that fell slightly short of market expectations, said it could double its stores outside of South Africa in the next four years.
Shoprite has 153 supermarkets in 16 countries outside South Africa. Those foreign outlets registered a 28 percent jump in sales in the 12 months to the end of June, nearly three times the rate of growth in its home market during the same period.
The bulk of the new stores would be in oil-rich Nigeria and Angola. The company sees scope for 44 new outlets in Nigeria and 21 in Angola in the next three to four years, Chief Executive Whitey Basson said.
After more than two years as an investor favorite, South African retailers are fast falling out of favor due to concern that high personal debt levels and reluctance among banks to lend more will squeeze spending in Africa’s biggest economy.
South African retail sales grew by a smaller-than-expected 1.9 percent in June, data from the government statistics office showed last week.