Choppies: The Entrepreneurial Transition

Choppies commenced its operations with a single store under the name “Wayside Supermarket” in Botswana in 1986. Over the past 31 years, Choppies has grown as a home brand in Botswana and spread its wings into eight other African nations and has become a significant retailer represented in the sub-Saharan African market. Between 1986 and 1992 the group had a single store at Lobaste, Botswana and between 1992 and 1999, it added one more. Since 1999, the group embarked on a fully-fledged expansion drive taking its number of stores to 217 in the African region.

It became the first retail company listed on both Botswana Stock Exchange (2012) and the Johannesburg Stock Exchange (2014). At present, the Choppies group operates in eight Southern African countries: Botswana, South Africa, Zimbabwe, Zambia, Kenya, Tanzania, Mozambique and Namibia and continues its expansion into new, as well as under-serviced areas in the existing markets. The management of Choppies is supported by over 300 qualified professionals.

The African markets are growing steadily,” says Mr. Ram Ottapathu, CEO of Choppies Enterprises Limited. “Other countries (excluding Botswana) where we have operations give us the opportunity to grow into new markets, representing the second engine of growth for the Group. Today, we have over 133 stores outside Botswana, which contributed meaningfully to our profits.”

Market analysts support Mr Ram’s views. In its study on African markets, accounting consultancy firm PWC says that the sub-Saharan African market is remaining as the next ‘Big One’ and it believes that it will remain as it is in the next few decades. “The African economy is one among the few economies in the world with an annual GDP growth of more than 5%. It’s young and connected middle class is growing fast and is still deciding on its favourite brands,” the PWC report said.

In the past decade, many sub-Saharan Africa countries have emerged among the world’s fastest-growing economies. For example, in 2016, Namibia, Tanzania, and Mozambique grew at average annual rates of 6.1%, 6.69 %, and 6.3% respectively. Many African countries are moving towards better administration and deepening democracy. These developments, coupled with urbanisation and an increasing demand-oriented consumer class, have given the retailers a lot to be positive about.

The Choppies group, managed through its Botswana and the rest of Africa divisions, is a food and general merchandise retailer, selling a vast range of products at a great value. The group always puts customers at the heart of its business and always treat them with the utmost respect.

Through its Hyper Stores, Super Stores and Value Stores brands, Choppies serve customers across the diverse spectrum of Botswana society and is expanding its reach into the African continent. Over 50% of Botswana shop regularly in Choppies stores and the group has some of the most loyal customers in the country.

Today, the group operates 217 stores across Africa and employs over 16 000 people 7 000 in Botswana alone.

Choppies’ offer to customers mainly focuses on food and non-edible groceries, clothing, tobacco, beauty products and general merchandise. The offer also includes additional value added services such as financial transactions at the point of sales. In addition to manufacturer-branded products, we have a number of Choppies private label products to suit every budget.

Choppies stores range from large hypermarkets where customers can buy everything under one roof, through to small convenience stores where customers can shop quickly for their immediate needs. In addition, Choppies will be soon launching our online business which will give its customers the opportunity to shop from their homes and have their order delivered to their doors in a fixed time slots.

The group has developed Centralized Distribution Channels (CDC), in Botswana and South Africa and Zimbabwe with a strategic focus on accelerating the level of central supply in its business. At present, supply in Botswana is 60% centralized, while in South Africa and Zimbabwe it is 80%, 50% respectively. The Group aims to take this to new levels by the end of 2018 financial period. At present, Choppies operates five CDCs across the eight countries catering for groceries, fresh and perishable produce.

Choppies group has already been established as an economy retailer and it has a competitive advantage in pricing, distribution centre and store locations. The group achieves its low pricing strategy by having a smooth business cycle maintained by unbeatable distribution centre which supported by trucking network and excellent store locations.

It is estimated that each week over 3.5 million customers visit its 215 stores under three different banners in eight African countries. The Choppies group continues its conquering journey in sustainability, social responsibility, and employment opportunity. It is all part of the group‘s firm commitment to creating opportunities and bringing value to customers and communities across the African continent.

With over 16 000 staff members, the Choppies Group is a significant employment generator in the retail sector in Africa. The success of Choppies business is a result of the collective effort of this massive staff force.

The Group will continue to address the socio-economic challenges faced by the communities it serves through the supply of high-quality, affordable food for all customers while providing significant employment and economic opportunities across its value chain.

South Africa- the next big market for Choppies

At present the Choppies group operates 74 stores in South Africa, the location such as Gauteng, Northwest, Mpumalanga , Free States, Limpopo, KwaZulu-Natal and Eastern Cape. “ We are planning to open another 10 more stores by the end of the current financial year, taking our total number of stores over 80” says Mr Ram.

Choppies’ move comes at a time when the South African retail market faces, various economic and socio economic challenges. Factors like exchange rate volatility, the declining availability of credit and inflationary pressures adversely affected the finances of many households. However, most consumers remain aspirational, with the demand remaining strong for essential FMCG, especially products which are in line with global trends.

However, Mr. Nazzar Mulackal, Director of Operations at Choppies South Africa is confident: “We have already established here as a value retailer. We are very competent in pricing. Besides, we have been widening our product ranges in order to increase our value shares and target a wider consumer group,” he said.

According to a study of the South African retail market by Euromonitor International, grocery retailers continue to dominate retailing value sales in South Africa: “Many grocery retailers are becoming increasingly competitive in non-grocery specialists channels. Some grocery retailers operating in channels such as supermarket have introduced ranges of non-grocery products in their stores in order to showcase their differentiated offers and be more competitive,”

We have implemented aggressive pricing strategies and have expanded our product lines across numerous categories. In addition we have introduced complementary services such sale of electricity, airtime, bill payments, and play tickets,” says, Andrew Coppin, Operations Director of Jwayelani Retail – a retail business acquired by the Choppies group last year.

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