CLAIM: Botswana headquartered retailer, Choppies Enterprise Limited, will exit the Zimbabwean market amid a deteriorating environment which has seen a surge in the informal sector leaving the formal retailers to battle for crumbs.
SOURCE: NewsDay
VERDICT: True
In an article headlined Rising informal sector drives Choppies out of Zim, published on 2 December 2024, NewsDay, a daily private local newspaper, claimed that retailer, Choppies Enterprise Limited will be leaving Zimbabwe, citing the deteriorating trading environment and stiff competition from the informal sector.
‘Botswana headquartered retailer, Choppies Enterprise Limited, will exit the Zimbabwean market amid a deteriorating environment which has seen a surge in the informal sector leaving the formal retailers to battle for crumbs,’reads the NewsDay article.
The paper goes on to refer to a recent cautionary statement by Choppies to the effect that there has been a significant shift to the informal retail sector over the past two years, leaving the formal retail sector to fight a decline of up to 30% in footfall and having to compete with the informal sector.
In a cautionary statement dated 29 November 2024, the Botswana Stock Exchange-listed company announced that it has entered into discussions regarding a possible sale of the business operations of Nanavac (Pty) Ltd trading as Choppies Zimbabwe for cash, as part of its strategic intent to focus on profitable retail. The ‘possible sale’ is subject to certain conditions and regulatory approval.
The company’s board of directors said in the last two years, there has been a significant shift to the informal retail sector, leaving the formal retail sector to battle a reduction of up to 30% in customers and having to compete with the informal sector.
‘While we believe in the country’s long-term viability, Choppies as a group needs more capital to support its Zimbabwean operations for extended periods and has already invested significant capital to support the operations,’ reads the company’s cautionary statement.
‘Due to the factors mentioned above, we have decided to exit the country. Shareholders are cautioned that there is no certainty at this stage that the discussions will lead to a formal transaction, and approval from the Zimbabwean Competition and Tariff Commission is required.’
About Choppies Enterprises Limited
· Choppies Enterprises Limited is incorporated in the Republic of Botswana under registration number BW00001142508
· The Company has a primary listing on the BSE and a secondary listing on the JSE (Johannesburg Stock Exchange).
· In Zimbabwe Nanavac (Pty) Ltd is trading as Choppies Zimbabwe and is a grocery retailer with 30 stores in the country.
· Choppies entered the Zimbabwean market in 2013 by acquiring most stores of the existing Spar network.
· Choppies Enterprises Limited also has a presence in Namibia and Zambia
Conclusion
The claim ‘Botswana headquartered retailer, Choppies Enterprise Limited, will exit the Zimbabwean market amid a deteriorating environment which has seen a surge in the informal sector leaving the formal retailers to battle for crumbs’ has been rated as true. The company has issued a cautionary statement dated 29 November stating that it has ‘decided to exit the country’. .
