Spar Group Ltd., a South African food and liquor retailer, is working with an Angolan partner to open a store in the country’s capital, Luanda, in the next six months, Finance Director Mark Godfrey said.
“Spar will provide products and logistics support,” Godfrey said in an interview last week.
“We decided some time ago that in taking our business model to Africa we needed local expertise or we were wasting our time.” Godfrey declined to name the Angolan partner.
As food retail in South Africa is becoming more competitive, grocers are expanding in the rest of Africa.
Shoprite Holdings Ltd., South Africa’s largest retailer, opened its first store in Luanda in 2003.
It has 153 supermarkets outside South Africa in 16 African countries.
Massmart Holdings Ltd., the South African food and goods wholesaler owned by Wal-Mart Stores Inc., with 44 stores on the continent outside of South Africa, said August 22 that it plans to shift some focus from South Africa to elsewhere on its home continent because consumers are struggling to repay debt as unemployment rises and accelerating inflation curbs profit growth.
Carrefour SA, the French-based retailer in partnership with distributor CFAO SA, plans to open shops in eight African countries.
Spar’s shares slid 0.7 percent to 111.17 rand as of 9:10 a.m. in Johannesburg, extending their decline this year to 16 percent.
The FTSE/JSE Africa Food & Drug Retailers Index has fallen 20 percent this year.
“There has been a very clear change in Spar’s thinking about Africa in the past 18 months, looking to grow its presence,” said Kirsty Laschinger, retail analyst at SBG Securities Ltd. in Johannesburg.
“Angola is a tough geography with increasing competition, but it’s a big economy and if you are looking to grow in the west coast of Africa you have to be in the big countries.”
With gross domestic product of $114 billion, Angola is sub-Saharan Africa’s third-biggest economy after South Africa and Nigeria.
The economy is forecast by the country’s central bank to expand 6.5 percent this year.
Related Tags:Spar Group, South African food, liquor retailer, Angolan partner, Luanda, Finance Director Mark Godfrey, business model to Africa, food retail in South Africa, expanding in the rest of Africa, Shoprite Holdings, store in Luanda, South African food