South African retail giant Shoprite Holdings is making a decisive retreat from another pair of African markets, announcing plans to exit Ghana and Malawi as part of its ongoing recalibration outside its home base.
- Shoprite Holdings announced plans to exit Ghana and Malawi markets as part of a regional recalibration strategy.
- These exits signify Shoprite’s sixth and seventh withdrawals from African markets outside South Africa within the past four years.
- Shoprite cited challenges such as currency volatility, economic policies, and lease terms impacting profitability in these regions.
According to Reuters, the company confirmed on Tuesday that its subsidiary, Shoprite Malawi, entered into an agreement on June 6 to sell its five trading stores. The deal remains subject to regulatory approvals, notably from Malawi’s Competition and Fair Trading Commission and the Reserve Bank of Malawi.
In Ghana, Shoprite disclosed that it had received a binding offer in June for the acquisition of seven trading stores and a distribution warehouse. The group described the sale as “highly probable,” signaling a definitive pullout from what was once viewed as a high-growth West African market.
Shoprite’s move has revealed the persistent challenges faced by global retailers across several African economies, where currency volatility and shifting economic policies can quickly erode margins.
The company has encountered numerous obstacles in these regions, including unstable exchange rates, surging inflation, restrictive import regulations, and leases pegged to the US dollar – all of which have weighed on profitability.
Both the Ghanaian and Malawian operations have now been classified as discontinued in Shoprite’s financial statements under IFRS 5 accounting standards.
The announcement had an immediate effect on investor sentiment. By 07:53 GMT, Shoprite’s shares had fallen 2.60% on the Johannesburg Stock Exchange (JSE), reflecting concerns over the retailer’s diminishing African footprint beyond South Africa.
Shoprite’s Africa retrenchment: A strategic reset
These exits mark Shoprite’s sixth and seventh withdrawals from African markets outside its home country, following similar pullouts from Nigeria, Kenya, the Democratic Republic of Congo, Uganda, and Madagascar over the past four years.
The retailer’s strategic repositioning comes amid persistent operational headwinds across several African economies, including currency devaluations, supply chain disruptions, regulatory bottlenecks, and disappointing returns on investment.
Yet, Shoprite’s aggressive retreat from its pan-African ambitions sharply contrasts with its robust expansion within South Africa.
Over the past year, the company has launched hundreds of new stores in its domestic market, scaled up its Sixty60 e-commerce delivery service, and diversified into adjacent retail categories such as pet supplies, healthcare, and outdoor gear.
