Botswana based retailer Choppies supermarket is set to shut down operations in Kenya and attributed the decision to a distressed business environment.
According to a news report by the Business Daily, the retailer made the announcement on Wednesday when it held an Extraordinary General Meeting (EGM) with shareholders.
“Zambia has a steady performance in a volatile economy, Kenya’s distressed business has been identified for disposal. Tanzania and Mozambique are distressed while Namibia is performing as expected. In Botswana there is steady income flow under difficult trading circumstances, South Africa North West business is distressed and identified for disposal,” Wilfred Mpai, Choppies Director told shareholders during the EGM according to the Business Daily.
Choppies currently has 12 stores in Kenya and it had announnced plans to triple that number by 2022 before it faced financial difficulties. Choppies’fortunes have been on a downward trajectory in recent months as the retailer experienced stock outs amid rising operating costs.
The stock outs forced the retailer to close its Kiambu and Bungoma branches in July and internal feuds centered on the retailer’s CEO Ramachandran Ottapathu, who has been accused of malpractices, also signaled the beginning of the end for the retailer. Increased competition from new multinational entrants, such as Carrefour and Game Stores, in the retail industry has similarly affected the supermarket’s operations in the country.
As reported by the Business Daily, Choppies is not the only southern Africa based retailer that is experiencing operational difficulties in Kenya’s tough business environment. According to the local daily, Cape Town based fashion retailer TFG has been forced to close operations in many African countries due to performing poorly in the foreign states. The retailer last month revealed that it was contemplating on whether or not to close its six outlets in Kenya and Ghana as a result of poor performance.
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