Africa’s biggest supermarket chain, Shoprite Holdings, will take advantage of disarray in Kenya’s grocery sector to open its first stores in the major East African market by the end of the year.
Two of Kenya’s three top retailers are failing, opening the door to chains such as Shoprite and Carrefour .
Chief executive Pieter Engelbrecht said Shoprite had never considered Kenya before because of the dominance of the three players.
Six of its seven new stores will be in Nairobi.
“Retail in Kenya is in total disarray, we could now go in and secure seven premises without paying anything other than agreed rental,” he said after the presentation of Shoprite’s half-year results on Tuesday.
The group reported a 14.2% increase in headline earnings per share and an interim dividend increase of 13.9% after Monday’s market close. Shares in Shoprite hit an all-time high of R274.45.
Cratos Capital equities trader Greg Davies said: “Excellent numbers really. Also in the background is the possibility that the Reserve Bank will begin a series of rate cuts, so people will have more disposable income and Shoprite is rightly positioned to benefit from that.”
Shoprite, which is 17% owned by retail tycoon Christo Wiese, has grown from eight supermarkets in 1979 to a no-frills massmarket grocer with operations in 15 African countries, including two stores in Uganda.
South African retailers have struggled to lift earnings at home as high unemployment and household debt squeezed consumer income.
It has fared better than most with its focus on budget-conscious consumers, including more than 10 million South Africans living on welfare grants. – Reuters