Like it plans with its Nigerian operations, South Africa’s supermarket group, Shoprite Holdings, is planning to exit Kenya.
The retail group has announced plans to sell or close its remaining two stores in Kenya by the end of December.
Therefore, Shoprite said it will be leaving the East African country two years after it began operations.
It noted that its Kenyan business has under-performed.
“Kenya has continued to under-perform relative to our return requirements,” the company said after posting a 16.6% rise in annual group earnings.
Shoprite’s Chief Executive, Pieter Engelbrecht, said the South African firm has renegotiated 48 rental agreements by either reducing rent payments or converting them to local currency.
It has also restricted capital allocations to its supermarkets outside South Africa, as part of an ongoing review of its operations across the African market.
Diluted headline earnings per share (HEPS) from continuing operations climbed to 765.8 cents against a restated 746.9 cents a year earlier, while adjusted diluted HEPS rose 16.6%.
Shoprite declared a final dividend of 227 cents per share and said it had traded ahead of expectations since the beginning of July.
Shoprite announced the commencement of a formal process to discontinue its operation in Nigeria in August.
The retail group announced a 6.4 per cent increase (R156.9billion) in total sales of merchandise for the outgoing year despite the challenges posed by the COVID-19 pandemic.
However, it said it would discontinue its Nigeria operation following approaches from various potential investors.
In the same vein, the company said it in line with its re-evaluation of the group’s operating model in Nigeria.
The supermarket group has been reviewing its long-term options across Africa as currency devaluations, logistics challenges and weak consumer spending in Nigeria, Angola, and Zambia have affected earnings.