Friday, July 1, 2022

Choppies aims to swallow Supasave, Megasave

Choppies Enterprise Limited, the dominant mass grocery retail player, said this week it is stalking Supasave and its supplier, Megasave, as part of its ambitious plan to hit US $1 billion (about P8.25 billion) mark turnover in the next two years.

The Botswana Competition Authority confirmed Choppies’ plans, saying it has been approached by the country’s largest chain store with a view to take all Supave and Megasave shares.

The move falls under Section 59 of the Competition Act and it is expected that within┬á30 days┬áthe regulator must have acted on Choppies’┬árequest. Based on┬áthe Act,┬á┬á Choppies’ move should pass since it does not┬áamount to market abuse nor does it weaken competition as both┬áSupasave and Megasave market share is very insignificant.

“Supasave is similarly a service provider of fast moving consumer goods, while Megasave was incorporated for purposes of sourcing and supplying stock to Supasave.

“Supasave operates six stores in Botswana and accounts for less than one percent of the national market share in the retails industry,” a statement from the Competition Authority said this week.

Last week, Choppies issued┬áa trading update warning shareholders that it has entered “into negotiations with a third party which, if┬ásuccessfully┬áconcluded and subject to regulatory┬áapproval”┬ámay affect its share┬áprice.

Choppies is a giant in the mass grocery retail in Botswana and is the leader in fast moving goods and general merchandise and is planning some forays both within Botswana and the Southern African region.

“We are planning to acquire other businesses in the region (outside Botswana and South Africa) and we have┬áover P160 million┬ásitting cash to do that,” Chief Executive Officer, Ram Ottapath, has said.

Ottapath┬áis a great follower of the late legend┬áSteve Jobs, the Apple and the world’s┬áIT icon who died in 2011.

He has built Choppies ÔÇô 54 store in Botswana –into one of the biggest export brands and is planning to reach a target mark of 75 in two years. He is also aiming to open┬á12 more stores in South Africa in the next two years.

Lately,┬áChoppies┬á brightened the faces of investors by announcing that its half year results to December 31, 2013 will be “significantly better”┬á than it originally thought.

The Lobatse-founded company operates 63 stores between Botswana and South Africa - and a large number of them in Botswana.
Botswana contributes about 83 percent of its total revenue, estimated at P 4 billion per annum, while the remaining 17 percent comes from South Africa. However, going forward, South Africa is expected to power the retail chain profits coupled by its strategic warehousing that opened in Rustenburg last year.

“South Africa is a huge market and we feel that there are opportunities in semi urban and urban areas,” Ottapath said,┬áadding that “currently they are investing┬áin Limpopo, Northwest and also looking into Freestate.

Choppies controls 30 percent of the┬ánational markets share, followed by┬áSpar at a distant 21 percent, Pick ‘Pay 14 percent, Shoprite at 10 and the rest at 25 percent.

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