South African retailer giant Shoprite exits Malawi

Transcript

00:00The Competition and Fair Trading Commission approved the transfer of five ShopRite stores

00:13to Carson Investment Trust on 12 September, sealing the fate of 25 years of retail history.

00:21Hundreds of workers now face uncertain futures, with Carson Investment Trust assuming control

00:27of stores in the Longwe, Blantyre and Limbe, following similar moves in Nigeria, Kenya and

00:35the Democratic Republic of Congo.

00:39A deal between ShopRite and the Carson Investment Trust will see the latter enter the retail

00:44space for the first time and purchase ShopRite's five stores in the country.

00:49They are venturing for the first time in the retail.

00:54That's why possibly you could understand why as a commission, we are so keen on those

00:59conditionalities, especially on the issue of standards.

01:02ShopWise is a new creation actually, a new creation for the sake of taking over the retail business

01:11of ShopRite.

01:14The sale was approved by the country's Competition and Fair Trading Commission, but with conditions,

01:19including the retention of workers and paying benefits to staff who choose to leave.

01:26ShopWise, which is the new name of ShopRite's old stores, will also operate under a tough environment,

01:33which drove the South African retailer's decision to exit the market.

01:37These include a weak currency, a lack of foreign reserves and high import costs, making it difficult

01:44to operate sustainably and profitably.

01:48The decision to close has concerned many Malawians, who have been accustomed to the price-conscious

01:53market ShopRite operates in.

01:55The economy's actually is the quality of their services that they have lended to us as Malawians

02:02specifically, and to say the fact, it's so sad to see that the thing that has been there

02:09for such a long time, we have grown up to know what ShopRite is, and now it is no more.

02:17The timing of its departure from Malawi could not be more devastating.

02:24The economy is emerging, with inflation reaching 28.2% in August, and foreign currency reserves

02:32covering less than one month of imports, far below the recommended three-month minimum.

02:38ShopRite's exit reflects problems in Africa's investment climate that extend beyond retail.

02:46Social instability, infrastructure deficits, and regulatory uncertainty have forced numerous

02:52multinational companies to reconsider their operations on the continent.