Shoprite Announces Plan To Leave Kenya
Shoprite said it will be leaving the East African country two years after it began operations in the country.
Joy Kalu 
South Africa’s supermarket group, Shoprite Holdings has announced plans to sell or close its remaining two stores in Kenya by the end of December.
The supermarket group said it will be leaving the East African country two years after it began operations in the country.
The company announced this on Tuesday, citing the Kenyan business has continued to underperform relative to the return requirements, according to nairametics.
"Kenya has continued to underperform relative to our return requirements,” the company said after posting a 16.6 percent rise in annual group earnings. The South African firm has renegotiated 48 rental agreements by either reducing rent payments or converting them to local currency, Chief Executive, Pieter Engelbrecht, said.
The group has also restricted capital allocations to its supermarkets outside South Africa, as part of an ongoing review of its operations in Africa.
Shoprite, while declaring a final dividend of 227 cents per share, said it had traded ahead of expectations since the beginning of July.
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The company said the decision to exit Kenya was influenced by the ripple effects of the COVID-19 pandemic on its operations and earnings.
In August, Shoprite had announced plans to discontinue its operation in Nigeria.
Concerning divesting in Nigeria, it had said, “Following approaches from various potential investors, and in line with our re-evaluation of the Group’s operating model in Nigeria, the Board has decided to initiate a formal process to consider the potential sale of all, or a majority stake, in Retail Supermarkets Nigeria Limited, a subsidiary of Shoprite International Limited.
“As such, Retail Supermarkets Nigeria Limited may be classified as a discontinued operation when Shoprite reports its results for the year. Any further updates will be provided to the market at the appropriate time.”
The company has also been hit by currency devaluations and supply chain problems in its Sub-saharan African business and is reviewing if it will continue operations also in Angola and Zambia. It announced a 6.4% rise in sales for the accounting year in June.
Shoprite owns 2,300 stores across Africa and opened its first Kenyan outlet at the Nairobi Westgate Mall. The South African company invested in Kenya with the aim of taking a slice of the retail space after the Kenyan retail companies Uchumi Supermarkets and Nakumatt collapsed.
