Botswana-based retailer Choppies is reaping the benefits of its long-term strategy to exit unprofitable regions and strengthen its core operations.
Over the past few years, the group has systematically withdrawn from SA, Kenya, Mozambique and Tanzania, shifting its focus to markets where it can achieve sustainable profitability.
The latest step in this transformation is its departure from Zimbabwe. Each exit was driven by economic challenges, operational inefficiencies and shifts in consumer behaviour that made those markets increasingly difficult to operate in.
The strategy is paying off. Choppies’ valuation has surged 25% in the past five years, 29% in the past year and 21% over the past six months, reflecting investor confidence in its ability to streamline operations and enhance profitability. Its remaining operations in Botswana, Namibia, Zambia have shown steady growth, according to the company’s 2024 annual report.
While Choppies’ decision to leave Zimbabwe was strategic rather than reactive, it underlines the broader struggles of formal retail in the country. When Choppies first entered Zimbabwe in 2013, it had high hopes of tapping into a growing consumer base. However, over time, government-imposed exchange rate policies, fluctuating currencies and a weakening formal retail sector created an increasingly tough operating environment.
The informal sector in Zimbabwe has grown rapidly, capturing up to 30% of formal retailers’ foot traffic, according to reports, as consumers seek more affordable goods and flexible pricing. This has made it harder for large retailers like Choppies to compete. In November 2024 Choppies announced its decision to exit, citing the need for significant capital investment to sustain operations in the country, something that could no longer be justified given the weak economic outlook.
The retailer’s 30-store network in Zimbabwe was acquired by SaiMart, a business owned by Raj Modi, Zimbabwe’s deputy minister of industry and commerce. Modi had previously sold his retail operations to Choppies in 2013, making this a full-circle moment for the chain’s stores in the country.
With the burden of struggling operations lifted, Choppies has seen strong financial gains. For the 2024 financial year, the group reported a 31.8% increase in group retail sales to 8.47-billion pula (R11.35bn), while earnings before interest, taxes, depreciation and amortisation jumped 33.2% to 622-million pula. More importantly, excluding Zimbabwe, profit after tax surged by 23.4%, reflecting the financial benefits of its restructuring strategy.
Debt reduction remains a priority in the 2025 financial year. After being technically insolvent in 2023, Choppies has steadily improved its financial position, cutting net debt by 64-million pula in the latest reporting period. A long-term debt reduction agreement with lenders remains in place, with plans to further strengthen the balance sheet through 2026.
With a streamlined footprint, Choppies is now focusing on expansion in profitable regions. The retailer plans to roll out hardware stores in Namibia and Zambia, leveraging its Kamoso acquisition, which added liquor stores, milling, grain packaging and water bottling operations to its portfolio.
Choppies is also expanding its financial services platform, Monyglob, in Namibia and Zambia with the aim of growing its nonretail revenue streams. The retailer’s On The Go format has gained traction, with the first store opening in Zambia and more planned across the region.
“We are happy with the progress we have seen regarding the implementation of our strategy and are confident that it will continue to unlock value for shareholders going forward as we have expanded our retail offering,” CEO Ramachandran Ottapathu said.
“With control over our value chain, ensuring efficiencies, cost savings and steady supply, we expect to see significant growth once the business stabilises and is fully integrated. We are starting to see some light on the horizon as we move forward.”
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