Choppies acquires retail chain in SA
The fast growing retail store, Choppies, is on a brisk course to purchase 21 stores in the South African Provinces of Kwazulu Natal and Eastern Cape, for an undisclosed amount.
Choppies’ ambitious plan to open about 60 new stores in South Africa, is taking shape, the latest step by Choppies Enterprises, in a proposed acquisition of retail outlets owned by niche supermarket group Jwayelani.
On 18 December, 2015, Choppies filed an application with the Competition Commission of South Africa regarding its intention to acquire 21 retail stores in KwaZulu-Natal and the Eastern Cape currently owned and operated by Jwayelani Retail Proprietary Limited.
Jwayelani currently holds 22 retail stores, a distribution centre, meat plant and bakery in the two provinces. The Jwayelani chain which started as a butchery, is now a convenience store chain that operates in Durban, Pietermaritzburg, Pinetown, Empangeni, Estcourt, Umzinto, and Flagstaff. Choppies showed intention to penetrate the South African retail space with the commissioning of an 8,000 square metre fruit and vegetable distribution centre in Rustenburg in December, 2014, which at 35 percent operational capacity, is well positioned to service 100 stores without any further capital outlays.
“In SA the infrastructure that we put in can take up to 100 stores without any more capital expenditure,” said chief executive Ramachadran Ottaphatu, after listing on the Johannesburg Stock Exchange (JSE) in the second quarter of 2015.
Large supermarkets such as Shoprite, Pick n Pay, and Spar, dominate the South African retail sector which some observers opine, will dent Choppies’ prospects of seeing returns in SA. However Choppies plans to seize business opportunities in areas with less retail offerings.
The company, which also has a presence in Zimbabwe, has set a store expansion target of 200 stores across at least six African countries by the end of 2016.
The existing store base is 125 across the three countries as well as seven distribution centres with total warehouse space of 50 313 square metres.
Choppies is also looking to establish a presence in Tanzania and Zambia, where less than 15 percent of the retail market is formalised.
Meanwhile, Choppies Zimbabwe scooped the inaugural Confederation of Zimbabwe Retailers (CZR) Retailer of the Year Award in the last quarter of 2014.