Botswana retail set for growth says analyst
WeekendPost.co.bw/ - Feb 18th 2014, 11:51
Botswana has emerged to be the best new market for global retailers in Sub-Saharan Africa; and the retail sector is expected to witness modest growth and more competition in 2014.
The sector has grown at a phenomenal pace over the years, with the most attractive sectors being clothing, accessories, food and drink, home and kitchen appliances. Garry Juma, an investment analyst with Motswedi Securities, said more growth and more competition into the retail sector should be expected in 2014.
“Growth is expected in this sector with the presence of new players such as Shoppers Supermarkets’ which is aggressively rolling out its branch network throughout the country,” said Juma.
To date Shoppers has 16 outlets in Botswana and intends to reach a target of 40 stores. Choppies on the other hand are still on the expansionary mode and currently have 56 stores dotted around Botswana with the possibility of adding more in the near future.
A large portion of the modern retail sector in Botswana is dominated by a small number of firms, which control franchises or are strategic partners of retail transnational’s. These include Pick n Pay Holdings Ltd, Shoprite Holdings Ltd, Spar Group Ltd, Woolworths Holdings Ltd, Choppies group and other retailers who are in the clothing and furniture retail chains.
Despite the fact that the industry experienced a boom the major retail companies are from South Africa, very few are from Botswana. Juma described this trend as a ‘worrisome trend’ as it shows that Batswana are not
taking a leading role to benefit from this sector.
“Batswana should produce high quality goods that can compete in terms of both quality and pricing with the same products from outside. The local manufacturing base is not broad enough and sometimes the quality is not up to scratch,” said Juma.
The growth of this sector has been attributed to Botswana’s economic growth over the past 15 years, rising disposable incomes, stable political environment and friendly business environment.
Although no research has been done so far to ascertain its contribution to the economy, there is no doubt that it is contributing to the growth of the country’s GDP and has created many jobs for Batswana.
Juma pointed out that the economic contribution made by the industry is of great value to the economy and the public as it offers more employment opportunities. A case in point is the retail giant, Choppies which employs more than 5 200 employees in Botswana alone.
Juma pointed out that the presence of new malls and the ever changing consumer preferences and spending patterns will continue supporting growth of this sector. The recovery of the local economy will also boost disposables incomes and hence spending, further boosting this sector.
Currently retailers are faced with decline in disposable incomes especially over the past five years and power and water cuts. The government is dedicated to shifting away from a dependence on diamonds to increasing investment in the private retail sector.
However some experts are of the view that the retail sector has seen strong growth over the past five years, and that many of the opportunities have already been exploited.
Weekend Post ®. All rights reserved 2011.
Pioneer Foods deal will be PepsiCo's biggest in Sub-Saharan Africa
22/07/2019 - 09:04
The US food and beverages company says the deal, worth about R24bn, will boost the SA economy.
US retail sales rise as households spend more
18/07/2019 - 14:16
US retail sales increased more than expected in June, pointing to strong consumer spending, which could help to blunt some of the hit on the economy from weak business investment.
Tips for small business owners to survive load-shedding
20/03/2019 - 09:36
With small businesses already dealing with hikes in VAT and petrol, coupled with decreased consumer spending, load-shedding is a bridge too far, particularly for restauranteurs.
SA consumer spend shows moderate uptick ahead of festive season
18/12/2018 - 13:58
Consumers are ringing in the holiday season with a solid start to retail sales, according to Mastercard SpendingPulse™, which looks at overall retail spending trends across all payment types.
Global competitiveness: Sub-Saharan Africa still lags behind
20/11/2018 - 08:16
The latest World Economic Forum Global Competitive Index (GCI) finds Sub-Saharan Africa to be the poorest performing region globally. The only apparent bright spot is Mauritius, among the top 50 countries in the world.