Advertise with

Shoprite supermarket is adopting a new expansion plan to boost its presence.
Shoprite supermarket is adopting a new expansion plan to boost its presence.

Shoprite prepares to control Ugandan retail market


By Ali Twaha - Oct 25th 2017, 15:33

As Nakumatt Holdings Limited struggles for a lifeline in a financially-constrained market, Shoprite supermarket is adopting a new expansion plan to boost its presence. 

The South African franchise is to open up two new branches - one at Acacia mall in Kamwokya and another at Victoria mall in Entebbe.

Knight Frank, a real estate company, has signed up Shoprite Holdings and other international brands to take over the space that Nakumatt once occupied at Acacia mall.

According to Marc Du Toit, the head of retail at Knight Frank Uganda, signing up Shoprite is meant to boost traffic at their different shopping malls within the metropolis.

"Shoprite's addition to the mall's tenancy will re-affirm Victoria mall as the top family shopping destination in Entebbe since its opening in 2013. Shoprite will offer a broad range of goods and services including household items in addition to its primary food business," said Du Toit in a statement.

The expansion into Victoria mall and Acacia mall seems to be part of Shoprite group's expansion strategy at a time when the middle-class appears to be growing. Victoria Mall is ideally located five minutes away from Entebbe International airport, where most tourists to the country take their first shopping experience.

In a statement to The Observer, Pieter Engelbrecht, the chief executive officer of Shoprite Group, said: "We have now achieved 64 consecutive quarters of like for like sales growth. Our latest results are proof that the group is healthy and able to thrive across multiple brands and countries, notwithstanding the headwinds."

Shoprite is listed as a public company on the Johannesburg Stock Exchange and with secondary listings on both the Namibian and Zambian stock exchanges. The group operates 2,689 outlets in 15 countries across Africa and the Indian Ocean islands.

Market woe

Shoprite was the second international retailer, after Metro, to open shop in Uganda in 2000. When Metro was weighed down by a Barclays bank loan and closed shop, Shoprite enjoyed the market uninterrupted until Kenya's Uchumi launched services in 2005.

Some say it was partly due to the virgin market Shoprite was enjoying in Uganda that attracted regional retailers such as Nakumatt, Uchumi and Tuskys.

The competition among the supermarkets in the face of a tough economic environment, where a spike in inflation and a depreciation of the shilling have eaten into the revenues of the retail shops, made it tough for Shoprite.

For instance, in 2015, Shoprite Holdings signalled that it was embarking on disposing some of its assets in the East African region. It sold its three branches in Tanzania, citing low business sales.

Within the same time span, Shoprite also closed one of its largest outlets in the region at Metroplex mall in Naalya. Nakumatt occupied the Naalya premises until September, when it also closed.

It now appears that Shoprite's expansion plan is down to the market being there for the taking. With Nakumatt following Uchumi in exiting Uganda, and uncertainty hovering over Tuskys, Shoprite appears to see an opportunity to dominate the market.

Shoprite's opening another branch at Acacia mall and Victoria mall will bring its number of outlets to four countrywide.
© 2017 AllAfrica 

Read more about: supermarkets | shoprite | retailer | retail | expansion |

Related News

The changing UX and CX landscape
13/09/2019 - 16:16
An exceptional customer experience (CX) builds a foundation of loyalty and trust. Similarly, a positive user experience (UX) encourages brand connections with people wanting to come back for more. And yet, local organisations must learn to embrace these more effectively to differentiate themselves from their competitors.

Footgear gets go-ahead to buy Edcon's footwear brands
13/09/2019 - 09:24
Footgear, the South African retailer of branded and non-branded footwear, on Thursday received the green light to purchase the assets and business associated with Edcon Limited’s Edgars Active and High Key brands.

Ackermans launches A-list Summer collection
12/09/2019 - 11:08
With winter’s icy grip on the country, it's hard to believe that summer is around the corner. The onset of warmer days means that it’s almost time to ditch the winter wardrobe and embrace a lighter, brighter one. However, selecting a summer wardrobe can be a daunting experience, as consumers are spoilt for choice and simply don’t have the time to sift through the top trends - particularly when on a budget.

Shoprite boosts support for small-scale farming in local communities
12/09/2019 - 10:48
“Siya Kolisi” enthralls spectators in the streets of Langa, Cape Town, with his tackles and accurate passes, but this is not the 28-year-old Springbok captain. It is in fact 13-year-old Luxolo Ntsholo who has adopted the moniker.

Online shopping business to shake up retail sector
12/09/2019 - 09:40
Allsale Club is a members-only online shopping business that aims to save consumers money on everything from everyday branded items to luxury items.