Shoprite Holdings said that it expects to close or dispose of its remaining two stores in Kenya in the year ahead, leaving the country after opening its first store in the country more than two years ago.
Early August, the supermarket announced a plan to lay off 115 workers from its Kenyan business as it moves to shut its Nyali Branch in Mombasa.
The move was just three months after it closed its Waterfront branch in Nairobi’s Karen area, putting 104 individuals out of work.
It adds to the list of foreign retailers that have failed to crack the Kenyan market at a time when even local retailers are finding the going tough, with Tuskys Supermarket the latest to fall on hard times.
South African-owned Shoprite has already notified the Kenya Union of Commercial Food and Allied Workers (KUCFAW) of the impending layoffs and invited the lobby for a consultative meeting.
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The supermarket chain has been reviewing its long-term options in Africa as currency devaluations, supply issues, and low consumer spending in Angola, Nigeria, and Zambia have weighed on earnings.
"Kenya has continued to underperform relative to our return requirements," the retailer said, adding its decision to leave had been confirmed by the economic impact of COVID-19.
Shoprite opened its first supermarket in Kenya at Westgate Mall, Nairobi, in December 2018, hoping to take advantage of the disarray in Kenya's grocery sector after the collapse of Uchumi Supermarkets and Nakumatt, two of the country's top three retailers.
The decision to leave comes a month after Shoprite said it was considering reducing or selling all of its stake in its Nigerian subsidiary.
Shoprite, with more than 2,300 stores across Africa, reported a 6.4 per cent rise in sales for the year ended June 28, with like-for-like sales up by 4.4 per cent as customers spent more on groceries at its discount Usave and mid-to-upper end Checkers stores.
Shoprite declared a final dividend of 227 cents per share.