Choppies buys eight stores in South Africa
Pauline Dikuelo | Tuesday November 7, 2017 15:47
This follows the approval of the acquisition last week by the Competition Commission of South Africa, which resulted in the retailer’s number of stores rising to 82 in that country.
Arizona Wholesales and Butcheries operate in Nongoma, Eshowe, Jozini, Pangola, Mtubatuba, Hlabisa, Melmoth and Ulundi. According to Choppies chief executive officer Ramachandran Ottapathu, Arizona Wholesales and Butcheries’ footprint in Kwazulu-Natal complements their existing presence in the area adding that it will contribute to South African operations reaching profitability over the medium term.
“We are delighted to announce the addition of the Arizona stores to the Choppies group of stores. Their footprint in Kwazulu-Natal complements our existing presence in the area. This transaction and the subsequent synergies it will unlock should ultimately result in our South African operations reaching profitability over the medium term,” he said.
In addition Ottapathu noted that the business fits well with the Choppies strategy of being a strong relevant provider of consumer goods at affordable prices, serving urban, semi-urban and rural areas with products that offer value for money. “Arizona has established a strong foothold in a key target market for Choppies and has built a business with a solid foundation which will enable the business to achieve sustainable growth,” he said. Arizona Wholesalers and Butcheries started as an independent family-owned business in 1988 and expanded to eight retail outlets supplying groceries and butchery products in rural Kwazulu-Natal.
The business has built a considerable footprint in traditionally underserved areas in Kwazulu-Natal and employ more than 300 people. In an interview earlier this year, Ottapathu said the group’s capital expenditure budget for the current year to June 2018 is at P300 million. He said they plan to add 40 new stores to the 217 stores that they already have across the region. The bulk of the new stores will be opened in South Africa (13), Zambia (8), Kenya (4), Tanzania (3), Mozambique (3), Zimbabwe (2) and Namibia (3).
“Before the end of 2017 we will be opening our first store in Namibia. The plan is to open more shops in that market with time, but we don’t have a definite number and time frames as yet. But we already have about seven leases signed in Namibia. Apart from Namibia, there are no immediate plans to venture into new markets, but we are always exploring for opportunities in the region,” he said.