Shoprite considers global expansion

SHOPRITE would consider expanding outside Africa as the continent’s largest food retailer seeks additional fast-growing markets, the company’s chief executive Whitey Basson said.

“There are countries that have great potential,” Basson said, without giving a timeframe. The company would be wary of overpaying for acquisitions if it decided to use that method of growth, he said.

A move outside the company’s home continent would follow in the footsteps of fellow South African retailer Steinhoff International Holdings, which has transferred its primary listing to Frankfurt and made bids for companies in France, the UK and the US.

Shoprite Chairman and South Africa’s richest man, Christo Wiese, is also the biggest shareholder in Steinhoff.

Vietnam and Cambodia were examples of markets that look interesting to Shoprite, Basson said, while the company would consider India if the country further opened up its retail sector to foreign investors.

Unlike Steinhoff, the company did not see many opportunities in Europe and high levels of competition in the US made expansion there difficult, the chief executive said.

Shoprite operates in 15 African countries and got 17 percent of its trading profit from supermarkets outside its home market of South Africa in the year through June, compared with 12 percent a year earlier, the company said in its fullyear earnings statement.

Africa remains the source of much of the retailer’s future growth, Basson said.

Shares fell 1.2 percent to R196.16 at 9.27am on the JSE yesterday, valuing the company at R113 billion.

The stock has advanced 37 percent this year, the best non-mining performer on the FTSE/JSE Africa Top 40 Index.

However, yesterday, shares finished 0.02 percent to close at R196.85. – Bloomberg.