According to recent reports one of Africa’s biggest retail giants; Shoprite, has made it known that it will exiting Kenya by December of this year (2020), as a result of heavy losses incurred.
The decision to leave, is coming barely two months after the retail giant first made it presence known in East Africa.
One of its retail outlets in Kenya, has already been shut down. As of the time of writing this article, only two of a total of three outlets are still operational.
Shoprite in statements attached to its financial results for the year which ended on the 28th of June 2020 revealed that, “Kenya, with three stores at year-end, has continued to underperform relative to our return requirements. Post-year-end, one store has been closed.”
Shoprite’s financial statements also revealed the fact that it obtained a staggering loan of 1.5 billion Kenyan Shillings (around 238 million Rands) from Stanbic Kenya. The terms of the unsecured loan, state that it is payable in 21 months, at an interest rate of 9.7 percent.
Shoprite which first launched in Kenya in December of 2018, is among the variety of international retail establishment which have set up shop in Kenya in a bid to get a piece of the nation’s ever growing supermarket sector.
The retailer’s decision to exit Kenya, is coming just after speculation arose that it was looking to either leave Nigeria by reducing its presence in the country, or selling all of its stakes in the Nigerian subsidiary.
Shoprite made a trading loss of 181.3 million Kenyan Shillings (28.2 million rands) from its outlets outside of South Africa, including those in Kenya.
With over 2,300 outlets all across Africa, Shoprite saw a 6.4 percent increase in sales for the year that ended on the 28th of June 2020.
Shoprite South Africa, saw an 8.7 percent increase in sales despite the dire effect various COVID-19 lockdown and distancing restrictions had on Shoprite’s other outlets all over Africa.
According to Shoprite the past six months have been tough for its subsidiaries outside South Africa as a result of Coronavirus restrictions that affected opening as well as operational hours for stores, as well as movements and transportation, which in turn affected Shoprite’s customers and employees as well.
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