Table of Contents
Key Points
- Choppies considers selling Nanavac (Choppies Zimbabwe), a grocery retailer with 30 stores, as part of a strategic focus on profitability.
- Zimbabwe's informal retail market growth and declining foot traffic have pressured formal retailers like Choppies.
- The proposed sale, subject to regulatory approval, aligns with Choppies’ strategy to prioritize sustainable investments.
Choppies Enterprises, a Gaborone-based supermarket chain led by Botswana businessman Ramachandran Ottapathu, has announced discussions to sell the business operations of its wholly-owned Zimbabwean subsidiary, Nanavac (Pty) Ltd, trading as Choppies Zimbabwe.
The potential transaction aims to streamline Choppies’ operations and allow it to focus on profitable markets amid challenging conditions in Zimbabwe's formal retail sector.
Choppies exits signify strategic realignment
Choppies, through its subsidiary Choppies Zimbabwe, operates 30 grocery stores across the country but has faced challenges adapting to shifting consumer trends. Over the past two years, Zimbabwe has experienced a significant migration of shoppers to the informal retail sector, leading to a decline in foot traffic at formal retail outlets by as much as 30 percent.
In light of these challenges, Choppies has decided to exit the Zimbabwean market, despite its optimism about the country’s long-term potential. “The decision to explore the sale of Choppies Zimbabwe is part of our broader strategy to focus on sustainable growth and ensure profitable operations across the group,” the company said in a statement.
The sale, if finalized, will be conducted in cash, subject to regulatory approvals, including clearance from the Zimbabwean Competition and Tariff Commission. However, Choppies has cautioned shareholders that discussions are still ongoing, and there is no guarantee of a formal transaction at this stage.
Choppies prioritizes profitable market focus
Choppies Enterprises, co-founded by Ramachandran Ottapathu and Farouk Ismail in 1986, is Botswana’s largest retail chain, renowned for its extensive distribution network spanning South Africa, Zambia, Kenya, and Zimbabwe. The company caters to diverse markets with a mix of international food brands and private-label products.
Listed on both the Botswana Stock Exchange (BSE) and Johannesburg Stock Exchange (JSE), Choppies is strategically realigning its regional operations to focus on sustainable growth and profitability. This shift is evident in its decision to exit Zimbabwe, a move aimed at concentrating on markets that promise stronger returns and require lower capital investment, particularly in light of challenging operating conditions in the region.
Zimbabwe’s retail sector, marked by growing competition and a shift toward informal markets, has become increasingly difficult for formal retailers. Choppies’ exit underscores its broader strategy to streamline operations and reinforce its position in key markets, ensuring long-term success and resilience.
