Warc, 26 August 2013
JOHANNESBURG: Major regional retail chains are seeking to
capitalise on the rapid growth of the sub-Saharan African economy by expanding
their operations with Walmart's South African subsidiary becoming the latest to
announce growth plans.
Massmart, the Johannesburg-based retail group in which US
multinational Walmart has a 51% stake, said it plans to open 90 new stores
across the region over the next three years.
It plans to target the growing markets of Nigeria and Angola
and also to expand in East Africa by adding more brands from Walmart's outlets
elsewhere in the world and by increasing its physical presence. This could
include a joint venture with retailers in Kenya.
Massmart chief executive Grant Pattison said the company,
which has 359 stores in the region, would seek to acquire food retailers and
"slightly shift" its focus away from South Africa.
But the company will continue to concentrate most of its
resources on its home market, leading some observers to question whether it
could be left behind, especially after Shoprite, South Africa's largest
retailer, this week also announced ambitious plans for expansion.
Shoprite currently runs 153 supermarkets outside of South
Africa and its chief executive, Whitey Basson, said it could double that number
within four years. He also said the company wanted to build its presence in
Nigeria to up to 800 stores.
Massmart, the owner of local brands Makro and Builders'
Warehouse, like its peers, is targeting African cities for expansion as an
emerging middle class drives growth and demand for quality brands and modern
goods.
The IMF forecasts that the region will account for five of
the world's fastest-growing economies by 2018 and this growth is not solely
attracting retailers.
Major corporations, such as General Electric and Ford, are
increasingly focussing on the region, while leading international hotel chains
are also expanding their presence, as reported by Warc last month.
Hilton is seeking to build over 6,000 rooms in 23 hotels
while Marriott has plans for 3,900 rooms in 22 hotels.
Data sourced from Wall Street Journal, Independent Online,
Reuters, BDlive; additional content by Warc staff
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