Shoprite Holdings, South Africa’s largest supermarket chain, has largely completed the consolidation of its operations across Africa, though Mozambique remains under review, CEO Pieter Engelbrecht told Reuters on Tuesday.
The retailer had expanded extensively across the continent, surpassing rivals such as Pick n Pay and Walmart-owned Massmart to become the leading food retailer in about 15 countries.
Over the past five years, however, Shoprite has been reassessing its long-term options in Africa as currency volatility, lower commodity prices, high inflation, import duties, and dollar-based rentals have weighed on household incomes and pressured earnings.
In August, the company announced plans to exit Ghana and Malawi, following prior exits from Nigeria, Kenya, the Democratic Republic of Congo, Uganda, and Madagascar.
Its remaining operations now consist of 268 stores across seven countries, all members of the Southern African Development Community.
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Asked whether the retailer’s consolidation plan is now complete, Engelbrecht said, “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.”
He explained that the biggest challenge has been the stalled gas business in Mozambique, complicated by Islamist insurgent attacks in the port city of Palma in March 2021.
“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.”
The attacks halted a multibillion-dollar liquefied natural gas project by France’s TotalEnergies, which has been under force majeure since 2021.
TotalEnergies and Mozambique President Daniel Chapo have indicated the force majeure is expected to be lifted soon.
Engelbrecht also highlighted broader economic challenges in Africa.
“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 added that if Shoprite chooses to expand outside South Africa in the future, it will do so with a different operational model.
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Image Credit: Mzansi Agriculture Talk
