Thursday, May 23, 2024

Unavailability of retail space a hindrance to growth ÔÇô Ottappath

The Choppies Group, the market-leading mass grocery retailer in the country says it is currently challenged on its expansion drive by unavailability of retail property sites.

Speaking to Choppies Group Chief Executive (CEO) Ram Ottappath recently at the Ernst & Young strategic growth forum in Johannesburg South Africa, he highlighted that the property development is so slow in a lot of African countries where the retail group wants to expand.

“If we can get 20 sites by tomorrow, we can open 20 stores right away. Getting to wait for sites for a long period affects our expansion plans negatively,” said Ottappath.

He said the trade agreements and business partnerships need to be practically implemented. He also stated that there are barriers regarding the movement of goods from one country to the other. “We have adopted a strategy to support local producers in all the countries that we operate in. We have to expand in line with the legal framework of each country and we observe citizen indigenisation,” he stated.

He revealed that they are currently working with the retail site developers in each country. He expressed satisfaction with the performance of Choppies listed on the Johannesburg Stock Exchange (JSE), adding that the share price keeps on going up and down. He added that the objective has been to get liquidity first on the JSE.  Asked on the next site they plan to open a retail store, Ottappath stated that the board decides where and when to open an outlet.

“Leasing of outlets is slow in Tanzania, but getting better. Botswana is performing well as much as South Africa.  We are likely to add 5 more stores in Botswana,” the Choppies CEO stated.

He is of the view that Africa is not one country or one nation adding that each country has its own regulatory requirements. He said the other challenge is the mobility of resources across Africa as a continent.   Choppies listed on the Botswana Stock Exchange (BSE) in January 2012 after it received BSE’s approval to float 1.2 billion shares on the domestic main board.

Ottappath said that a secondary listing on the JSE exposed the group to a new universe of South African, regional and international investors whose investment mandate is limited to JSE-listed shares.  

While the sluggish economy and tough trading conditions are beginning to weigh heavily on the different sectors as evidenced by almost all the oldest commercials banks in Botswana recently, Choppies Enterprises, company’s results for the year ended 30 June, 2015 were significantly better than those reported for the year ended 30 June, 2014.

Ottappath indicated that they continue to evaluate expansion opportunities in existing and new markets, adding that they are in the advanced stages of entry into new markets in Southern and East Africa. “Human resource is also a challenge as well as talent retention. Each country should have conducive environment for doing business for the benefit of each economy,” he said.


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