HARARE
–
Leading
grocery
retailer,
Choppies
Enterprises
Limited
has
announced
plans
to
cease
its
operations
in
Zimbabwe
citing,
among
other
reasons,
competition
from
the
informal
sector.
In
a
statement,
the
Botswana
listed
firm
owned
by
Nanavac
(Pty)
Ltd,
said
it
has
started
negotiations
aimed
at
selling
the
company.
“The
board
of
directors
of
Choppies
(“Board”)
hereby
advises
all
shareholders
that
the
Company
has
entered
into
discussions
regarding
a
possible
sale
of
the
business
operations
of
Nanavac
(Pty)
Ltd
trading
as
Choppies
Zimbabwe
for
cash
(“Possible
Sale”),
which,
if
successfully
concluded,
could
have
an
impact
on
the
Company’s
share
price,”
said
the
company,
which
has
30
stores
in
Zimbabwe.
Added
the
retailer,
“The
Possible
Sale,
which
is
subject
to
certain
conditions
and
regulatory
approval,
is
aligned
to
the
strategic
intent
of
Choppies
to
focus
on
profitable
retail.
“In
Zimbabwe,
over
the
last
two
years,
there
has
been
a
significant
shift
to
the
informal
retail
sector,
leaving
the
formal
retail
sector
to
battle
a
reduction
of
up
to
30%
in
footfall
and
having
to
compete
with
the
informal
sector.”
Zimbabwe
has,
in
the
recent
few
years,
seen
the
proliferation
of
both
registered
and
unregistered
tuckshops
in
both
the
residential
areas
and
the
CBDs.
While
the
formal
shops
are
obliged
to
follow
scrupulous
business
conduct
with
heavy
penalties
hanging
above
their
heads
for
malpractices,
the
corner
shops
are
often
let
off
the
hook,
allowing
them
to
charge
their
goods
in
hard
currency.
Grocery
vendors,
likewise
have
emerged
as
another
layer
of
competition
and
are
found
on
city
pavements,
including
on
supermarket
verandas.
Competitors
of
big
shops
in
the
informal
sector
hardly
pay
any
tax
or
rentals,
leaving
them
with
the
leeway
to
vary
their
prices
downwards
where
necessary.
Choppies
added
in
its
statement,
“While
we
believe
in
the
country’s
long-term
viability,
Choppies
as
a
group
needs
more
capital
to
support
its
Zimbabwean
operations
for
extended
periods
and
has
already
invested
significant
capital
to
support
the
operations.
“Due
to
the
factors
mentioned
above
we
have
decided
to
exit
the
country.
“Shareholders
are
cautioned
that
there
is
no
certainty
at
this
stage
that
the
discussions
will
lead
to
a
formal
transaction,
and
approval
from
the
Zimbabwean
Competition
and
Tariff
Commission
is
required.
“The
company
advised
shareholders
“to
exercise
caution
when
trading
in
their
Choppies
shares
until
a
further
announcement
is
made”.