Shoprite Holdings Ltd. plans to invest $572 million on new supermarkets and business units in Angola, as Africa’s largest food retailer expands in fast-growing sub-Saharan markets.
President Jose Eduardo dos Santos has appointed a commission to negotiate potential tax breaks and other incentives for the Cape Town-based company, according to a May 18 statement published in the government gazette. The grocer will also upgrade its existing chain of Angolan stores. A Shoprite representative confirmed the investment plans by e-mail.
“In the long term, Angola has the potential to see quite good GDP-per-capita growth,” Bloomberg Intelligence retail analyst Charles Allen said by phone from London. “It also has a very low penetration of modern food retail.”
Angola replaced Zambia as Shoprite’s biggest contributor of sales outside South Africa in the second half of last year, the company said in February. Even as oil prices fell, the market “performed well,” and a large store near the capital, Luanda, was scheduled to reopen last month after burning down more than a year earlier, the retailer said.
Shoprite has 2,188 stores across 15 countries, according to its website, with the majority in South Africa. Consumer spending is under pressure in the retailer’s home market amid soaring food prices and high unemployment, while the Central Bank on Thursday cut its growth forecast for the year to 0.6 percent.
Shoprite plans an initial investment of $50 million in Angola, according to the gazette, which didn’t stipulate over what period the total spending would take place. The company’s shares declined 1.1 percent to 164.07 rand on Friday, valuing the retailer at 94 billion rand ($6 billion).