SHOPRITE Holdings Limited, South Africa’s largest grocery chain has put on hold its plans to acquire Zimbabwe’s biggest retail company, OK Zimbabwe.
Last month, Shoprite, the Johannesburg Stock Exchange-listed grocery company had entered into negotiations with OK Zimbabwe to acquire a controlling stake in the Zimbabwe Stock Exchange-listed retail counter.
Shoprite chief executive, Whitey Basson, was quoted saying negotiations were at preliminary stages and the retail group was looking at expanding into the region.
The South African retailer chain was also said to have paid over US$1 million for OK Zimbabwe, putting it into direct competition with another Zimbabwe retailer group, TM Supermarkets, in which South African retailer Pick n Pay has a stake
However, in statement released this week Shoprite said it was not yet ready to invest in Zimbabwe as the political environment was still not stable.
“Due to the current socio-economic and political uncertainty in Zimbabwe, Shoprite has decided not to engage in further investment opportunities in that country in the short to medium term,” the retailer said in a statement.
Shoprite Holdings Limited is an investment holdings company that, through its subsidiaries, constitutes a fast moving consumer goods retail operation on the African continent.
It owns and operates Shoprite, Checkers, Checkers Hyper, Usave, MediRite , OK Furniture, House & Home, Power Express, Hungry Lion, OK Foods, OK Grocer, OK MiniMark, Sentra and Value, and Megasave.
The Shoprite Group currently trades with 1 068 corporate and 275 franchise outlets in 17 countries across Africa , bringing the total number of stores in the group to 1 343.
Shoprite is in Uganda , Zambia , Nigeria , Tanzania , Mozambique , Mauritius , Malawi , Madagascar , Ghana and Angola . Shoprite Group started in 1979 with the purchase of a chain of eight supermarkets for R1 million.
South African investors have been making inroads into Zimbabwe following the restoration of investment confidence ushered by the inclusive Government.
Zimbabwe’s economy has started to register positive growth after years of successive negative growth, with indications that it recorded a growth rate of 1, 8 percent during the first quarter of this year.
This development has attracted a number of regional and international investors to invest in the fast growing sectors.
With the South African economy reported to have contracted for the third quarter in succession between April and June, the move could be a strategy by South Africans to flight their investment to potential Zimbabwean operations.