Choppies warns of profit dip as consumer spending drops
Lewanika Timothy | Wednesday March 25, 2026 06:25
In a cautionary announcement to the Botswana Stock Exchange (BSE) , the retailer said it expects profit after tax from total operations to decline by between four percent and 14%, while profit from continuing operations is projected to fall more sharply, ranging between 28% and 38%. The trading update, issued in line with both BSE and JSE Limited listing requirements, signals a notable deterioration in profitability despite continued revenue growth across the group’s operations. “Group profitability was impacted by Botswana diamond-market slump reducing consumer liquidity, devaluation of the pula to combat economic strain.
Government austerity measures constraining spending, inflationary cost base, and new stores not yet at maturity curve,” said the grocer headed by Ramachandran Ottapathu. The retailer pointed to a convergence of domestic and regional pressures, with Botswana’s macroeconomic slowdown feeding directly into reduced consumer spending power. The weakening pula has further pushed up input costs, while government fiscal tightening has dampened overall liquidity in the economy. Choppies also highlighted operational pressures within its regional footprint. In Namibia, government-subsidised commodities have squeezed margins, while in Zambia, deflation on key food lines driven by a strengthening kwacha has weighed on pricing power. Across markets, intensified promotional activity in a constrained consumer environment has further eroded margins. Despite the profit warning, the group maintained that its top-line performance remains resilient.
“The group’s revenue momentum remains strong, but profitability was temporarily impacted by weaker macroeconomics. The demand contraction is cyclical, but food retail fundamentals remain intact,” the company noted. However, despite the strong top line shareholders should expect a lower dividend payout. “We plan to declare a dividend, but lower than last year... reflecting lower profitability due to regional economic pressures,” the company said, adding that the payout will align with its policy of a 25% distribution ratio. The results reflect a broader shift in Botswana’s consumer landscape, where rising living costs, tighter liquidity and slower economic activity are beginning to filter through into retail performance. Even as Choppies continues to expand its footprint and workforce adding 626 employees during the period the operating environment is becoming increasingly difficult.