Choppies exits Zimbabwe as economic turmoil mounts

ZIMBABWE – Botswana-based supermarket chain Choppies has announced its exit from Zimbabwe, marking a turning point in its operations in Southern Africa. 

The company, which operates in Zimbabwe through Nanavac Investment Ltd, has begun seeking prospective buyers for its 30 stores in the country. The exit comes amid increasing challenges, including inflation, currency instability, and competition from informal retailers.

Choppies first entered the Zimbabwean market in 2013, acquiring 10 stores from SAI Enterprises (Pvt) Limited in a deal worth US$22.5 million. Over the years, it expanded its footprint, creating employment for over 1,000 people. 

However, economic hurdles have taken their toll. Choppies reported a 30% decline in foot traffic, attributing it partly to a shift in consumer preference towards the informal retail sector, which offers goods in US dollars at lower prices due to reduced regulatory and operational costs.

Zimbabwe’s economic conditions have been further exacerbated by fluctuations in the newly introduced Zimbabwe Gold (ZiG) currency, rampant inflation, and ongoing power outages. 

Additionally, droughts have impacted agricultural productivity, compounding the challenges faced by formal retailers like Choppies, which are required to operate using official exchange rates.

This announcement follows Choppies’ earlier warning in October 2024 that it might withdraw from the Zimbabwean market. The retailer highlighted unsustainable trading conditions as a driving factor behind the decision.

Formal retailers face mounting pressure

The struggles faced by Choppies echo broader challenges within Zimbabwe’s formal retail sector. In early November 2024, South African retailer Pick n Pay wrote down its investment in TM Supermarkets (Pvt) Limited to zero. 

TM, a partnership with Zimbabwean conglomerate Meikles Limited, operates 74 outlets in the country. Pick n Pay attributed the decision to persistent economic losses and hinted at a potential exit as it reassesses its operations outside South Africa.

Zimbabwe’s formal retail sector remains constrained by competition from informal traders, who often bypass regulations, tax obligations, and rental costs. This allows them to offer more competitive pricing, further eroding the market share of established supermarket chains.

Choppies faces hurdles beyond Zimbabwe

The challenges are not confined to Zimbabwe. Choppies has faced setbacks across the region in recent years. 

After withdrawing from Kenya, Mozambique, South Africa, and Tanzania in 2020, the company now operates only in Botswana, Namibia, and Zambia.

In Namibia, Choppies recently encountered legal complications after being fined N$2.2 million (US$120,000) by the Namibia Competition Commission for implementing a merger without regulatory approval. 

The merger involved partnering with Johannes Jacobus De Jager to integrate Choppies’ operations with Grootfontein Supermarket and Grootfontein Bottle Store.

Despite these challenges, Choppies remains committed to growth in Namibia, where it operates 18 stores. The retailer opened three new locations in December 2023 and has outlined plans to expand to 50 outlets in the country by 2028.