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UPDATE 1-Shoprite ends Kenya expansion, plans retreat from the country

Published 08/09/2020, 07:27
Updated 08/09/2020, 07:30
© Reuters.

(Recasts with Kenya)
JOHANNESBURG, Sept 8 (Reuters) - South Africa's Shoprite
Holdings SHPJ.J said on Tuesday it expected to close or
dispose of its remaining two stores in Kenya in the year ahead,
leaving the East African country after opening its first store
there more than two years ago.
The supermarket chain has been reviewing its long-term
options in Africa as currency devaluations, supply issues and
low consumer spending in Angola, Nigeria and Zambia have weighed
on earnings.
"Kenya has continued to underperform relative to our return
requirements," the retailer said, adding its decision to leave
had been confirmed by the economic impact of COVID-19.
Shoprite opened its first supermarket in Kenya at Westgate
Mall, Nairobi, in December 2018, hoping to take advantage of
disarray in Kenya's grocery sector after the collapse of Uchumi
Supermarkets and Nakumatt, two of the country's top three
retailers.
The decision to leave comes a month after Shoprite said it
was considering reducing or selling all of its stake in its
Nigerian subsidiary. Shoprite, with more than 2,300 stores across Africa,
reported a 6.4% rise in sales for the year ended June 28, with
like-for-like sales up by 4.4% as customers spent more on
groceries at its discount Usave and mid-to-upper end Checkers
stores.
Diluted headline earnings per share (HEPS), the main profit
measure used in South Africa, from continuing operations rose to
765.8 cents against a restated figure of 746.9 cents a year
earlier.
Shoprite declared a final dividend of 227 cents per share.

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