Choppies hits the P2 billion mark
The exceptional growth story of retail giant Choppies continues to bear fruit. The local company with 53 stores in Botswana, finally hit the P2 billion mark in revenue, according to their half-year ended December 31st, 2012 results. According to an analysis report from brokers Motswedi Securities, Choppies’ revenue shot up by 24 per cent to P2.0 billion, compared to the first half of 2011’s P1.6 billion. This, they said was mainly due to the company’s expansion pro- gramme both in Botswana and South Africa, growth in the Choppies’ house brands (which have higher margins), product mix and more efficient management processes. The comparative revenue growth from Botswana and South Africa is eight percent and 14percent respectively, with the balance attributable to new store openings. Botswana remains the biggest contributor to revenue at 77 per cent.
The secret to the growth has been the group’s focus on sectors which were previous poorly serviced by large retails. According Motswedi, Choppies’ operation of two different profile stores, which are Superstores & Hyper stores, makes it the largest supermarket chain in the country with a large footprint in the countryside.
“This strategy has worked well for the Group and has made it a household brand as it has been received well throughout the country in both rural and urban areas.” Botswana population having now reached the 2 million mark from 1.8 million persons, according to preliminary statistics from the 2011 Population and Housing Census and the steady growth of the population together with the recovery of the country’s economy, will create more revenue for the Group. They have also benefited from the slowdown in inflation, revenue was 24 percent despite a smaller increase (three percent) in food inflation during the period. It has not been plain sailing all for Choppies though be- cause while the numbers have grown as- tronomically, the brand image remains under threat. This comes on the backdrop of several incidents of bad press in the first half of 2013. Despite the negative publicity, the group’s bottom line has remained resilient, however. The Botswana Stock Exchange (BSE) listed company has seen its initial public offering grow more than double from a listing of P1.15 to a high of P2.70 in the period under review. Choppies added a new store to its network in Tonota two weekends ago.