Choppies considers exiting Zimbabwe

Choppies Enterprises Limited has announced its intention to sell the business operations of its wholly-owned subsidiary, Nanavac (Pty) Ltd, trading as Choppies Zimbabwe, subject to discussions and regulatory approval. This move aligns with the company's strategic focus on profitable retail and could significantly impact its share price, according to a statement issued by the board of directors.
Market Shift and Challenges in Zimbabwe

Choppies Zimbabwe operates 30 grocery retail stores across the country. However, over the past two years, Zimbabwe's formal retail sector has experienced a significant decline in customer footfall, estimated at 30%, due to a notable shift toward the informal sector. This shift has created intense competition for formal retailers like Choppies.

While the company expressed optimism about Zimbabwe's long-term economic viability, it noted that continuing operations in the country would require substantial additional capital. Choppies has already made significant investments to sustain its Zimbabwean operations but acknowledged the challenges of prolonged financial support.

"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 these factors, we have decided to exit the country," the board stated.

Potential Sale Details

The possible sale of Choppies Zimbabwe's operations would be a cash transaction, subject to certain conditions, including approval from the Zimbabwean Competition and Tariff Commission. The company emphasized that discussions are ongoing and that there is no guarantee of a formal transaction at this stage.
Caution to Shareholders

In compliance with the Botswana Stock Exchange (BSE) Listings Requirements, which mandate disclosure of any material events affecting market activity or share value, Choppies has advised shareholders to exercise caution when trading its shares. The outcome of the discussions will be announced in due course.

Choppies is primarily listed on the BSE and has a secondary listing on the Johannesburg Stock Exchange (JSE).

This decision represents a significant strategic shift for Choppies as it continues to realign its operations toward profitability in a challenging retail environment.