UGANDA, Kampala | Real Muloodi News | South Africa’s largest food retailer, Shoprite, has confirmed its exit from Uganda. In addition, Shoprite stated they would also quit the market in Madagascar, citing several reasons.
“In line with the group’s non-RSA review process, we have classified our operations in Madagascar and Uganda as discontinued,” the statement reads in part.
According to Shoprite’s 2020 financial figures, the company lost USh. 43.5 billion in 2020, up from USh. 24.5 billion in losses in 2017.
Shoprite has operated in Africa since 1990, but has suffered in many regions because of currency volatility.
Shoprite opened its first store in Uganda 21 years ago. Their supermarkets in Uganda include Shoprite Village Mall in Bugolobi, Victoria Mall in Entebbe, Acacia Mall in Kololo, and Lugogo Mall in Nakawa.
In a trading update on Monday, the reason given for discontinuing Uganda and Madagascar operations was “continued underperformance, relative to return requirement.” The group has already closed their operations in Nigeria and Kenya.
With the latest announcement, Shoprite will now operate in 11 African nations, including South Africa, generating about 80% of its revenue.
According to Shoprite’s trading updates, furniture sales increased in the first half of 2021, despite the stores being affected by the looting and violence that swept South Africa in July.
A recent update for the 53 weeks to July 4, 2021, shows that Shoprite furniture sector sales increased almost a quarter to R6.8 billion, including the growth of 38.6% in the second half of the period.
Of the 1,189 supermarkets trading under the Shoprite, Usave, Checkers and Checkers Hyper Banners, 119 stores were severely affected because of looting and fire damage.
Last week, their total merchandise sales from ongoing operations increased by 8.1 per cent to R168 billion, with its core supermarkets in South Africa growing to 9.3 per cent.
According to Reuters, Shoprite has evaluated its long-term solutions in Africa over the last year, as currency depreciation has cut commodity prices. High inflation has weighed on consumer incomes and earnings.
READ MORE LIKE THIS: