Shoprite proposes $572m investment in Angolan stores | Fin24
 
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Shoprite proposes $572m investment in Angolan stores

May 20 2016 18:27
Candido Mendes and John Bowker

Shoprite’s primary business, its South African stores, grew sales by 4.9% during a period when internal inflation reduced from 6% in the corresponding quarter to 3.4%.

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Johannesburg - Shoprite International plans to invest $572m in Angola to open new supermarkets and business units in Africa’s second-biggest oil producer, according to a statement published in the government gazette.

President Jose Eduardo dos Santos has appointed a commission to negotiate potential tax breaks and other incentives for the Cape Town-based company, according to the May 18 statement. Africa’s largest food retailer will also upgrade its existing chain of Angolan stores. A Shoprite representative said by e-mail she wasn’t immediately able to comment.

“In the long term, Angola has the potential to see quite good GDP-per-capita growth,” Bloomberg Intelligence retail analyst Charles Allen said by phone from London. “It also has a very low penetration of modern food retail.”

Angola replaced Zambia as Shoprite’s biggest contributor of sales outside South Africa in the second half of last year, the company said in February. Even as oil prices fell, the market “performed well,” while a large store near the capital, Luanda, reopened last month after burning down more than a year earlier, the retailer said. Shoprite has 2 188 stores across 15 countries, according to its website.

Shoprite plans an initial investment of $50m, according to the gazette, which didn’t stipulate over what period the total spending would take place. The company’s shares declined 1.1% to R164.07 on Friday, valuing the retailer at R94bn ($6bn).

shoprite  |  angola  |  retail industry
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