Features

Inside Choppies’ strategy to lift consumer confidence

Seeking win wins: Ottapathu PIC.KENNEDY RAMOKONE
 
Seeking win wins: Ottapathu PIC.KENNEDY RAMOKONE

The numbers gathered, analysed and produced monthly by Statistics Botswana don’t tell the full story.

For instance, the data agency’s figures say annual food inflation as at August was five percent, from 4.3% in July. The index assigns weights on various categories of food and measures the average movements in prices through the year.

The country imports much of its raw and processed food, mainly from South Africa, and the July changes to the exchange rate framework kicked off economy-wide price hikes that have added to consumers’ woes in a year in which another recession is expected.

The technicalities of weights, average movements and even the rationale for the price hikes, are not top of mind for consumers who have watched in dismay as the price of their shopping baskets has risen stubbornly through the year, while average salaries have remained stagnant.

Although the country does not currently have measurements of consumer confidence, all indications are that this key metric is low. The prices of basic commodities such as bread, various grains, meat and others, dominate discussions in the family, the street and on social media. While the most hopeful discuss survival strategies, generally, any talk of food prices these days involves sighs, desolation and misery.

Ramachandran Ottapathu, CEO of Choppies, says the group is keenly aware of the pressure consumers and the general economy are under.

“The buying power has been cut down and you can see that in the consumption patterns of the consumers,” he told Mmegi this week in a wide-ranging interview. “The consumer preferences have changed and they are buying in bulk and focussing on the basics. “Household items like bleach, dishwashing liquid, all these things have tapered down because they can't afford it and they can delay that consumption by one month or one week. “They are also shredding the luxuries and are sticking to the basics.”

With 113 stores nationwide, the Lobatse-born regional group is by far the largest grocer in the country and the best indicator of consumer confidence as well as trends in shoppers’ behaviour.

Ottapathu said the impact was also visible on Choppies.

“The economy is under strain: it is without doubt and anybody can see that. “We are not insulated from that strain. “This is such a big business and when anything happens in the economy, we are the first ones to get affected.”

As a 39-year old entity, Choppies has seen its fair share of ups and downs in consumer confidence. In the retail world, the festive season is generally a boon to the books, as shoppers, especially those fortunate enough to enjoy 13th cheques, increase their spending and average basket sizes.

However, Ottapathu says he does not see the situation improving before the end of the year. Most likely in the first or second quarter of next year, he says.

In the meantime, the CEO says Choppies is adopting strategies to support consumers and, in turn, support the business through the weaker trading environment.

“We are trying all our improvisation not to have the damage in a deeper way or avoid serious damage by giving more affordable products, by sourcing more affordable products and bringing in more value-added products to make it more attractive for the consumers to come to shop in Choppies. “We are coming out with a birthday promotion very soon, the likes of which has never been seen in the country. “It will be in the media very soon and you will see that the prices we will give are unique. “We are also coming out with a customer reward programme soon.”

One “reward” Choppies has been involved in for years is its supply chain development programme in which the grocer supports farmers to produce the quality and quantity that can be placed on the grocers’ shelves. The programme is one of the country’s biggest farmer support initiatives, partnering with producers, while aligning with the nation’s long held food security and import substitution goals.

“I always take pride in that,” Ottapathu said. “I used to tell people and I still say that we were the catalyst of growing the farming industry here because we were the first ones to start giving advances to farmers and at any point between P30 and P40 million Pula would be outstanding from the farmers to our balance sheet. “This is done without security, without interest. “This is real social development and we are continuing that. The journey never stops. “We continue to support the farmers and we lose money also in the process such as when due to all this climate change and other issues, a farmer gets affected and in turn it affects us as well.”

The CEO says even in the strained economic times, Choppies is standing with consumers and stakeholders who have built it up through the years.

“We just want Batswana to support the brand and they have been supporting; they made this brand. “So, each one of our countrymen can take pride in creating this brand. “They must continue to do that and we will also reward in an appropriate way.”