Shoprite nears completion of Africa consolidation, with Mozambique facing possible exit

AFRICA – Shoprite Holdings, South Africa’s largest supermarket chain, is close to finalising the restructuring of its African operations, though its presence in Mozambique remains under review.

The retailer has spent years expanding into African markets, building a footprint that outpaced rivals like Pick n Pay and Walmart-owned Massmart, with operations once spanning about 15 countries.

However, since 2020, the group has been reassessing its portfolio in response to currency fluctuations, weaker commodity prices, inflationary pressures, and high costs linked to imports and US dollar (US$) denominated rents.

This process has led to exits from several markets, including Nigeria, Kenya, the Democratic Republic of Congo, Uganda, Madagascar, Ghana, and Malawi.

As a result, Shoprite now operates 268 outlets across seven countries, all of which are members of the Southern African Development Community (SADC).

Chief Executive Pieter Engelbrecht said the consolidation programme is effectively complete, but Mozambique has been placed under close monitoring due to wider economic and security risks.

He pointed to delays in reviving the liquefied natural gas industry and continued threats from Islamist insurgent groups in the northern province of Cabo Delgado.

The violence in Palma in 2021 halted a multi-billion US dollar (US$) LNG project by France’s TotalEnergies, which has remained under force majeure since then.

Although both TotalEnergies and Mozambican President Daniel Chapo have said that the suspension may soon be lifted, Engelbrecht noted the uncertainty continues to weigh on Mozambique’s economic outlook.

He added that without the LNG sector resuming operations, Mozambique’s long-term stability is in doubt, raising questions over whether Shoprite should continue investing in the country.

Future expansion outlook

Engelbrecht said that across Africa, businesses continue to grapple with weakened currencies and high inflation, factors that make new market entries unattractive in the near term.

According to him, the company does not anticipate moving into any fresh territories soon, as monetary and fiscal challenges persist across the continent.

If the retailer considers entering new markets again, he explained, it would adopt a different business structure than the one previously used.

For now, Shoprite’s African strategy appears to be narrowing, with its strongest focus on consolidating operations within SADC countries while closely monitoring developments in Mozambique.

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