- Shoprite May Exit African Market Amid Weak Earnings
Africa’s largest grocer, Shoprite, may close down operations outside South Africa amid weak earnings.
The company’s revenue outside South Africa declined by 4.9 percent in the third quarter of the year to worsen its year-to-date performance.
“If we have to close a country we will, we will make the decision no matter how hard it is,” Chief Executive Officer Pieter Engelbrecht told shareholders at an annual meeting on Monday. “We are not scared to take the hard decisions.”
The company attributed its weak performance in the quarter to currency devaluation and Xenophobic attacks on its Nigerian business following attacks on African immigrants living in South Africa.
Shoprite, however, said its management was reviewing the return on capital invested in the rest of the continent while simultaneously intensifying efforts to cut costs.
Despite the headwinds and sluggish growth, Shoprite’s South African unit delivered a 10.3 percent increase in revenue in the third quarter. Representing a 8.6 percent increase when compared with the 1.7 percent sales growth recorded during the same quarter of 2018.
