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Retailers make inroads into the African market

| Africa

While African economies have suffered some setbacks as a result of a weakened global economy, the continent is still attractive in the long term.

SA grocery, clothing and general retailers are making inroads into this potential, with the combined footprint of more than 1,400 stores on the continent.

In its interim results, Pick n Pay said its Rest of Africa division reported a 10.3% decline in profit before tax. But it said it remained confident of future prospects.

In the 26 weeks ended August 2016, the retailer opened seven new supermarkets outside SA with three in Namibia, three in Zambia and one in Zimbabwe. The group said it was on track with developing its operations in Ghana and Nigeria with both businesses in an early startup phase.

Pick n Pay said the first store in Ghana would open towards the end of the 2017 calendar year while Nigerian operations would probably commence in 2018.

Massmart, the high-volume, low-margin and low-cost distributor of branded consumer goods, said it was seeking new store opportunities across selected African countries next year. Massmart already operates in 13 countries in sub-Saharan Africa, with 405 stores. The group is the second-largest distributor of consumer goods in Africa. In the second half if its financial year, the Walmart subsidiary plans to open a new store in Nigeria, with three further non-SA store openings planned for 2017.

In the 26 weeks ended June 2016, Massmart reported total sales growth of 23.2% in non-SA stores.

Clothing retailer The Foschini Group (TFG) opened nine outlets in its African operations in the half-year to end September 2016. This included its first store in Kenya, which opened in The Junction Mall in Nairobi.

Over the past five years, the average value of consumer spending has risen by as much as 67%, making Kenya Africa’s fastest-growing retail market. TFG now has 185 outlets across seven countries in the rest of Africa. These outlets reported turnover growth of 17.7% in the period under review.

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