South Africa’s largest grocery retailer Shoprite Holdings the parent company of Shoprite Supermarket Uganda on Monday said it is exiting the Ugandan and Madagascar markets, adding to its growing list of African departures.
Shoprite runs five supermarket stores at Village Mall, Bugolobi, Lugogo Mall, Victoria Mall in Entebbe, and Acacia Mall in Kololo.
The DailyExpress had earlier reported that Shoprite was on the verge of exiting the Ugandan market amid shoppers decline, and the breaking news announced on Monday confirm this.
According to the SA-based management, Shoprite has been reviewing its long-term options across Africa over the past year as currency devaluations, lower commodity prices and high inflation have hit household incomes and weighed on earnings.
“In line with the group’s non-RSA review process, our operations in Madagascar and Uganda have been classified as discontinued,” Shoprite Group announced on Monday, August 23, bringing an end to a franchise store that has existed in Uganda since 2000.
The supermarket retailer expanded aggressively in Africa, surpassing rivals such as Pick n Pay and Walmart’s majority-owned Massmart to become the continent’s leading food retailer with more than 2,300 corporate-owned stores in 15 countries.
With the latest announcement, Shoprite would be operating in 11 countries in Africa, including SA, where it generates almost 80% of its revenue.
Well-placed sources had earlier reported that Majid Al Futtaim, the Franchise holder for French Supermarkets giants in the Middle East, Africa, and Asia holding talks to acquire all Shoprite outlets in Uganda as the exit talk gains momentum.
However, both Shoprite Group and Majid Al Futtaim have neither denied, nor confirmed the deal at the time of filing this story.
The exit of Shoprite, on the heels of other exits by Nakumatt, Tuskys, Uchumi raises questions around the sustainability of big supermarket chains in Uganda.
Interestingly though, local brands such as Quality Supermarkets and Capital Shoppers are said to be performing better.