Choppies pays hefty price for expansion
CHOPPIES Enterprises — the leading supermarket grocery retailer in Botswana — continued with its expansion strategy into the rest of Africa in the year to end-June, but the moves into new territories came with a more than 50% cost to the company’s earnings.
Choppies reported headline earnings per share of 7.25 thebe (about 9.48c) in the period under review, down from 16.92 thebe a year earlier. Turnover, however, increased 24% to 7.4-billion pula, while gross profit rose 12% to 1.44-billion pula.
CEO Ramachandran Ottapathu said Choppies’s full-year performance had been affected by pre-operative expenses in Zambia and Kenya. He said the company had also incurred losses in Zimbabwe due to depressed economic conditions, which resulted in a shortage of cash in circulation. The knock-on effect had been a decline in purchases per transaction.
Choppies, not unlike Shoprite — which is the biggest retailer in Africa — has ambitious growth targets for the continent. The retailer lists its focus as East Africa, with emphasis on Tanzania and Kenya. Shoprite has yet to successfully branch out in East Africa. According to PwC, Kenya and Tanzania are among 10 countries with high potential for retail growth in sub-Saharan Africa.
iTowers, Gaborone, Botswana
SA retailers lobby Masisi to counter Seretse
Property developers who own mall developments in Botswana are looking at taking the next step in their bid to lobby for a further softening of a Trade Act that compels South African chain stores to partner 51 percent with locals if they are to be granted trading licences.
Retail business is big in Botswana. It is worth close to P15 billion annually. The bulk of this money goes to South African retail giants. Recently, the Minister of Trade, Industry, and Investment Vincent Seretse reiterated his stance that he was not going to back down and grant South African chain store owners a waiver to widen their footprint in the country by opening new outlets. If Business Botswana president, Leta Mosienyane’s view that they are free to lobby anyone is anything to go by, then Vice President Mokgweetsi Masisi appears to be the next office bearer that the retailers and property developers with the help of Business Botswana will visit to get him to soften Seretse’s clutched fist. Their argument appears to hinge mostly on employment creation, a task that Masisi is overseeing; they will also point to their role in helping diversify the economy; and the potential consequences of forcing this law through.
Botswana: Concerns Over On and Off-Net Call Costs
On the backdrop of an outcry for reduction of internet data prices in the neighbouring South Africa, an expert engaged by the Botswana Communications Regulatory Authority (BOCRA) has revealed that there is no evidence of excessive pricing in mobile broadband in Botswana.
According to an official from Inter Connect Communications (ICC), Eric Tyson, mobile broadband prices are favorable despite some prices being above regional average.
According to Tyson, the prices are even made more attractive to the consumers by the different packages offered to customers by the different networks. “The packages are just unbelievably attractive, customers are given a chance to choose between daily, weekly or monthly subscription depending on their budget,” said Noble Katse, BOCRA Director of Business Development. Meanwhile, the ICC officials also revealed that they have recommended that BOCRA should advise mobile network operators to remove the difference between on-net and off-net call costs.
eBucks rewards programme enters Botswana
After 16 years of operating in South Africa, the programme that rewards customers for doing well, is now at home in Botswana.
In the neighbouring SA, eBucks Rewards is FNB and RMB Private Bank’s rewards programme that enables one to earn eBucks for doing everyday things like shopping, filling up with fuel or loading airtime. You can spend the eBucks you earn on fuel, electronics and appliances, travel, books, CDs and DVDs, flowers, outdoor equipment, and fashion - you name it. With eBucks Rewards one can save money every time one spends.
According to Boitumelo Mogopa, FNB Retail Director at the launch of eBucks rewards in Gaborone, “The introduction of eBucks Rewards was informed by a thorough market research on the needs and banking behaviour of our consumer base. We collaborated with the eBucks team from FNB Group and leveraged from their experience whilst creating a relevant programme for the Botswana market.
As we built a solid track record of many firsts, we are very grateful that our customers and Batswana embraced all the innovative solutions we offered, in turn allowing us to contribute to the economic development of our country. Thus, together we are proud of the role we have played in making Botswana a country we can all be proud of as we celebrate 50 years of Independence.