Shoppers stand outside the main entrance of the new Shoprite outlet in
Kano, Nigeria, on March 20, 2014. The South African retail giant is set
to open its first stores in Kenya by the end of 2018. AFP PHOTO / AMINU
ABUBAKAR
Africa’s biggest supermarket chain, Shoprite Holdings,
will take advantage of disarray in Kenya’s
grocery sector to open its first stores in the major East African market by the end of this year.
grocery sector to open its first stores in the major East African market by the end of this year.
Two
of Kenya’s three top retailers - Uchumi Supermarkets and former
regional giant, Nakumatt - are failing, opening the door to chains such
as Shoprite and Carrefour.
Chief executive Pieter
Engelbrecht said Shoprite had never considered Kenya before because of
the dominance of those three players. Six of its seven new stores will
be in Nairobi.
“Retail in Kenya currently is in total
disarray... we could now go in and secure seven premises without paying
anything other than agreed rental,” he told Reuters over the phone after
the presentation of Shoprite’s half-year results on Tuesday.
The
group reported a 14.2 per cent increase in headline earnings per share
and an interim dividend increase of 13.9 per cent after Monday’s market
close.
Shares in Shoprite hit an all-time high of 274.45 rand ($23) and was up 2.24 per cent to 263.24 rand ($22) by 1318 GMT.
“Excellent numbers really. Also in the background is the
possibility that the Reserve Bank will begin a series of rate cuts, so
people will have more disposable income and Shoprite is rightly
positioned to benefit from that,” Cratos Capital equities trader Greg
Davies said.
Growth
Shoprite,
which is 17-percent owned by retail tycoon Christo Wiese, has grown
from eight supermarkets in 1979 to a no-frills mass-market grocer with
operations in 15 African countries including two stores in Uganda.
South
African retailers have struggled to lift earnings at home as high
unemployment and household debt has squeezed consumer income.
It
has fared better than most with its focus on budget-conscious
consumers, including more than 10 million South Africans on welfare
grants.
Recently announced increases in those grants will help boost sales at Shoprite, Engelbrecht said.
The company has also set its sights outside Africa, he said, and is exploring an opportunity in Eastern Europe.
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