French chains find market in Ivory Coast
● Battered minibus taxis snake the perimeter of Ivory Coast’s latest shopping hot spot, a brand-new mall in a sprawling Abidjan suburb that shows how grocers like France’s Carrefour are turning their attention to lower-income African customers.
The parking lot reserved for car owners lies empty, contrasting with the throng of shoppers inside the $30m (R434m) Cosmos Mall, which opened in October.
They include Nafua Karamoko, a 30-yearold teacher who has recently converted to the convenience of supermarkets from informal marketplaces.
“It’s clean, well-stocked and the prices don’t differ much from the local market where I normally do my shopping,” said Karamoko, filling her cart with Carrefour’s cooking oil, rice and frozen chicken.
Up for grabs for the likes of the French chain is a market with a formal retail penetration of 35%, meaning just over a third of shopping is done in stores as opposed to marketplaces.
That makes Ivory Coast the secondbiggest promising retail centre in Africa behind Kenya, according to a study by data analytics company Nielsen.
Carrefour has three supermarkets in the country and plans to add as many as 10 more across Ivory Coast, Senegal and Cameroon this year.
South African retailers lead the foreign presence in West Africa’s English-speaking countries such as Ghana and Nigeria, where the likes of supermarket chain Shoprite Holdings and Walmart’s Massmart Holdings have stores.
“If we want to develop in the African market we can’t limit ourselves to one type of client or neighbourhood,” said JeanChristophe Brindeau, CEO of CFAO Retail, Carrefour’s partner in West African countries that include Senegal.
In Yopougon, where the Cosmos Mall is located, “we’re targeting consumers with less buying power that still want to do their shopping in a clean and safe environment”.
The Ivorian economy, estimated at about $40bn, is the biggest in Francophone West Africa and is expected to expand by 7.5% this year, according to the International Monetary Fund.
President Alassane Ouattara has overseen a breakneck recovery since a decade of polit- ical instability ended in 2011, attracting investors keen to tap rising consumer confidence and major infrastructure projects such as an Abidjan commuter train network and a toll bridge.
International companies expanding and doing business in Ivory Coast are still largely dominated by those from France, including trainmaker Alstom, construction firm Bouygues, ports giant Bollore as well as Carrefour.
Carrefour is under pressure from online retailing in its home market and is reducing store space there to adapt to the changing trading environment.
In African countries including Ivory Coast, less than 1% of retail sales went through online channels in 2018, according to Euromonitor.
A possible barrier to Carrefour’s expansion plans lies in local giant Prosuma, which dominates shopping malls in the world’s biggest cocoa grower and is controlled by wealthy Lebanese families who have been in Ivory Coast for decades.
Prosuma is the owner of Cap Sud, one of the biggest malls in Francophone West Africa, and has supermarkets, hypermarkets and a network of small convenience stores in its portfolio of more than 126 stores.
That means food prices on the shelves of Carrefour’s hypermarkets need to be as low as possible, enough to engage in a price war with the local market leaders.
The French chain has already started operating the Supeco chain in Senegal’s capital, Dakar, and is considering the same cashand-carry style format in Ivory Coast and elsewhere to target shoppers on modest budgets.
“Instead of a à20 [R327] basket they might go for a à10 basket, which means we have to adapt our stock and prices for this specific consumer group,” said Brindeau.
Another barrier to growth is rising rental costs.
With demand for new malls and supermarkets in Ivory Coast on the rise, the price of retail space has surged, according to estate agency Knight Frank. That partly accounts for why CFAO announced four years ago it would have more than 100 stores in eight countries in coastal West Africa by 2025, but has opened just four stores in two countries since.
But the opportunity outweighs the challenges, with both Carrefour and Prosuma keen to go where the rising incomes are, rather than wait for those customers to come to more affluent parts of Abidjan where malls are already established.
“The Ivorian consumer is a real consumer; they like their local products, but they love foreign brands too and are increasingly being able to afford it,” said Carole Toutoukpo, director of Prosuma’s SCI Business Centre, which manages the group’s mall portfolio.
There is plenty of room for competing chains, she said.