Shoprite Holdings, Africa’s largest retailer, on Tuesday said it will dispose of its two remaining stores in Kenya and exit the country.
The retailer opened its first store more than two years ago and has had a rough experience with the Kenyan market.
The supermarket chain has been reviewing its long-term options in Africa as currency devaluations, supply issues and low consumer spending in Angola, Nigeria and Zambia have weighed on earnings.
"Kenya has continued to underperform relative to our return requirements," the retailer said, adding its decision to leave had been confirmed by the economic impact of Covid-19.
Shoprite opened its first supermarket in Kenya at the Westgate Mall, Nairobi, in December 2018, hoping to take advantage of disarray in Kenya's grocery sector after the collapse of Uchumi Supermarkets and Nakumatt, two of the country's top three retailers.
However, the supermarket chain found the Kenyan market to be very difficult to hack.
In fact, the decision to close its Kenyan branch comes a month after Shoprite said it was considering reducing or selling all of its stake in its Nigerian subsidiary.
Now the supermarket chain will not go ahead with its expansion plans. In Kenya, Shoprite had targeted opening seven more stores, including six in Nairobi.
The South African retailer is now left with two stores in Nairobi -- at Garden City and Westgate malls -- which it plans to close, exiting the Kenyan market.
Shoprite, with more than 2,300 stores across Africa, reported a 6.4 percent rise in sales for the year ended June 28, with like-for-like sales up by 4.4% as customers spent more on groceries at its discount Usave and mid-to-upper end Checkers stores.
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