Shoprite announces plan to exit Kenya

Shoprite, Africa’s largest food retailer, has announced plans to close its stores in Kenya.

This comes after the company announced in August that it had begun the formal process of liquidating its majority share in its Nigerian business.

“Kenya has continued to underperform relative to our return requirements,” it said on Tuesday adding that its decision to leave was reinforced by the impact of the COVID-19 pandemic.

Pieter Engelbrecht, Shoprite’s chief executive officer, also said the company has renegotiated 48 rental agreements as part of its ongoing business review.

It said the rents have now been renegotiated to reduced rates in some cases or converted to local currency.

At present, Shoprite has two stores in Nairobi, the Kenyan capital, in Garden City and Westgate Mall.

Since the year began, the retailer has shut down two stores in Kenya including the branch in City Mall store in Nyali, Mombasa; a move that affected 115 staff.

The financials for the year ended June 28 showed that its outlets outside South Africa made a trading loss of 28.2 million rands; adding that it has been a difficult six months for its branches outside South Africa.

At the time, the company said it was evaluating all of its operations across Africa “based on current and future performance”.

Previous financial statements released by the company has cited currency devaluations, supply problems and weak consumer spending in Angola, Nigeria and Zambia as factors that were affecting performance.

Shoprite launched in Nigeria nearly 15 years ago, opening its first store in Lagos in December 2005.

Now, it has 25 stores across Nigeria.

It opened its first store in Kenya in December 2018 with a target of opening seven stores.