The Botswana retail industry has grown at a phenomenal pace. However the growth is expected to slow down as the market is almost saturated.
The Industry has certainly experienced some strong growth over the past decade and has seen many retail giants, especially from South Africa setting up operations in the country.
The market is currently dominated by retail giants like Pick n Pay Holdings Ltd, Shoprite Holdings Ltd, Spar Group Ltd, Woolworths Holdings Ltd, Choppies group and other retailers who are in the clothing and furniture retail chains.
Garry Juma, an investment analyst with Motswedi Securities, said tremendous growth has been realised but there are many players competing for small market.
“The advent of new shopping malls especially around Gaborone has resulted in the splitting of business among the existing players and will make it difficult for other small players to enter the market,” Juma said.
Juma said despite the fact that the industry experienced a boom the major retail companies are from South Africa, very few are from Botswana.
“It’s a worrisome trend and it shows that Batswana are not taking a leading role to benefit from this sector,” said Juma.
The government is dedicated to shifting away from a dependence on diamonds to increasing investment in the private retail sector. However experts are of the view that the retail sector has seen strong growth over the past five years, and that many of the opportunities have already been exploited.
The growth of this sector has been attributed to Botswana’s economic growth over the past 15 years, rising disposable incomes, stable political environment and friendly business environment.
Some of the challenges retailers are faced with decline in disposable incomes especially over the past five years and power and water cuts.
Juma pointed out that the economic contribution made by the industry is of great value to the economy and the public as it offers more employment opportunities.
“Although no research has been done so far to ascertain its contribution to the economy, there is no doubt that it is contributing to the growth of the country’s GDP and has created many jobs for Batswana,” he added.
Choppies Stores employs over 5,200 employees in the country from its 56 shops dotted around the country. “This sector also contributes to the growth of other downstream industries which all contributes to the country’s GDP,” he said.
Juma added that though the government has tried its best to set up the necessary infrastructure more still needs to be done to fill the gap. Private companies such as Turnstar have also played a pivotal role by building state of the art and modern shopping malls which can attract any international company.
