Shoprite To Shutdown Another Kenyan Store Four Months After First Closure

South African retail giant, Shoprite, is shutting down one of its stores in Kenya as the supermarket continues to struggle amid the pandemic which has disrupted grocery shoppers' activities within the country. The decision to end the store's operation comes three months after it closed one in Nairobi.

The Shoprite store that will be shutdown is in City Mall, located in Nyali, Mombasa, Kenya. The closure will affect 115 workers at the store, and the company has informed Kenyan Union of Commercial Food and Allied Workers (KUCFAW) - which accounts for 92 of the staff - of its decision.

The City Mall store was opened a year ago, August 29, 2019, and will be shutdown this August 31, 2020. According to Shoprite management in a letter sent to KUCFAW, the store's shutdown is due to redundancy. This makes it the second Shoprite supermarket to be closed in Kenya within four moths, with the first being April 2020 - leaving just two left in the East African country.

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While explaining its position, Shoprite said, “It is contemplated that the intended date of termination on account of redundancy will be August 31, 2020,” Shoprite was quoted, adding that, "There are currently 115 persons employed at the branch of which 92 are members of KUCFW.”

The company added that, “It is unfortunate that we have no alternative but to terminate the employment of the valued employees that have helped to establish this store. The decision was not taken lightly,” it said, according to CGTN Africa. Shoprite first entered Kenyan retail market in December 2019.

Is Shoprite Existing Non-South African Markets?

AllNews gathered that the current economic situation and projections is making Shoprite reevaluate its African operations. Last week, Shoprite Holdings Limited had announced that it may discontinue its operations in Nigeria following drop in sales - lockdown of businesses and restriction of movements had prevented individuals from shopping.

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Shoprite said it will sell off its assets or majority stakes in its Nigerian subsidiary, Retail Supermarkets Nigeria Limited, and by year end when it releases its financial results, "Retail Supermarkets Nigeria Limited may be classified as a discontinued operation."

Investors Are Lining Up To Acquire Shoprite

AllNews believes Shoprite is being approached by high-net-worth investors, as the company, apart from its retail business, is also in the real estate business. While speaking on selling off its Nigerian asset, Shoprite stated that it has moved to process the offers being tendered.

“Following approaches from various potential investors, and in line with our re-evaluation of the Group’s operating model in Nigeria, the Board has decided to initiate a formal process to consider the potential sale of all, or a majority stake, in Retail Supermarkets Nigeria Limited, a subsidiary of Shoprite International Limited,” Shoprite said.