Retail giant confirms binding offers and exit plans amid ongoing strategy shift
South Africa’s retail behemoth, Shoprite Holdings, has confirmed its imminent exit from Ghana and Malawi, marking a continued retreat from several African markets in a bid to consolidate operations within its domestic stronghold.
Binding offers in Ghana, pending approval in Malawi
In a statement issued on Tuesday, Shoprite disclosed that it had received a binding offer in June for its Ghanaian operations, which comprise seven stores and a warehouse. The company described the deal as “highly probable,” signaling an advanced stage in negotiations.
In Malawi, Shoprite has entered into a formal agreement to sell five outlets, subject to regulatory clearance from both the Competition and Fair Trading Commission and the Reserve Bank of Malawi.
Exit aligns with strategy to focus on South African core
The decision to offload these assets is part of a broader repositioning strategy by the retail group, which has been actively scaling back its pan-African expansion to focus on South Africa—its most profitable and stable market.
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A report by Reuters indicated that this move reflects Shoprite’s prioritization of performance and stability amid rising challenges in foreign markets.
Tough terrain: Why Shoprite is exiting African markets
Shoprite, once hailed as Africa’s largest grocery chain with a presence in 15 countries at its peak, has in recent years pulled out of several countries including Nigeria, Kenya, Uganda, Madagascar, and the Democratic Republic of Congo.
Key factors contributing to these exits include:
- Currency volatility
- High inflation
- Heavy import duties
- Dollar-denominated leases
- Stiff local competition
In Ghana, the retailer has grappled with limited profitability, increasing market competition, and reduced capital investment from its parent company.
Financial outlook remains strong despite exits
Despite its withdrawal from select African markets, Shoprite’s core business continues to post healthy numbers. For the 52 weeks ending June 29, the group expects:
- Headline earnings per share to increase by 9.4% to 19.4%
- Group sales from continuing operations to rise by 8.9% to 252.7 billion rand (approx. $14 billion)
Nevertheless, investor sentiment dipped slightly as Shoprite’s shares fell by 2.6% on the Johannesburg Stock Exchange on Tuesday following the exit announcement.
