Africa: Shoprite’s Africa Gamble Falls Flat

Shoprite is pulling out of Ghana and Malawi after struggling for years to make money outside South Africa.

The company once hoped to be Africa’s biggest supermarket chain, opening stores in more than 15 countries. But weak currencies, rising prices and high import costs made that dream impossible.

In Malawi, Shoprite is closing after 25 years. It sold its five stores to a local company called Karson. The country’s Competition and Fair-Trading Commission approved the deal but told Karson to follow strict rules.

Karson must keep workers who want to stay and give proper benefits to those leaving. It must also report every three months for two years to show it is sticking to the agreement. The stores will now trade as Shopwise Trading Limited.

Many in Malawi worry about what this means for jobs. Retail is the country’s second-biggest sector, but it has been shrinking because of import costs and a shortage of foreign currency.

In Ghana, Shoprite is selling seven stores and a warehouse. The company says the deal is “highly probable,” meaning another exit is near.

Shoprite has already left Nigeria, Kenya, Uganda, Madagascar and the Democratic Republic of the Congo.

At home, though, things look bright. Shoprite opened 225 new stores in South Africa last year, bringing its total to 2,577 supermarkets.

By Scrolla.