Shoprite Opens In The DRC Amid Mixed Reactions

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VENTURE AFRICA – Africa’s leading supermarket group, Shoprite has commissioned its first supermarket in the Democratic Republic of the Congo (DRC) as it continues to ramp up operations in other African countries outside its home maarket.

As contained in a report filed by Cedric Bra, a retailing analyst at Euromonitor International, the supermarket which is located in the nation’s capital, Kinshasa is a fruition of South Africa’s biggest supermarket chain’s five-year plan for the DRC since 2007. 

According to Bra, Shoprite’s interest in Kinshasa stems from the fact that the DRC is among the fastest growing markets in sub-Saharan Africa, this is in addition to a steadily improving standard of living.

Furthermore, there has been a consistent rise in the country’s economy as shown in its GDP. Between 2003 and 2011 for instance, the Democratic Republic of Congo recorded an annual real GDP growth of 6 percent.

This has caused a boom in the capital city’s construction and real estate sectors, resulting in skyrocketing property prices and a rise in the cost of living.

The retail giant will be competing with a large informal trading sector, which Bra said will pose great challenge in terms of combining competitive prices with a better shopping environment which are needed to lure customers away from open markets and street stalls into Shoprite.

The company will also be faced with the challenges posed by the country’s current position at the bottom six of the World Bank’s 2012 ease of doing business report, placing 178 out of 183 countries. This ranking is an aftermath of incessant power outages and non-availability of infrastructure that are required to conduct business successfully.

Kinshasa is the nation’s most populated city and is also facing serious transport and road infrastructure problems, in addition to underdeveloped local supply chains.

Concerning the blend of good prospects indicated by the DRC’s 20 percent growth in gross national income (GNI) between 2006 and 2011, and widespread poverty coupled with a microcosmic formal trading customer base, Bra believes it may take a while before a large percentage of consumers can afford to carry out their daily shopping at Shoprite.

Shoprite is strategically positioned in the upmarket district of La Gombe which gives it access to a base of high-income earners and expats who can afford to shop at its mall.

The Shoprite Group has been operating in Africa for more than 15 years, with stores in 17 countries. Outside South Africa, the group has 155 supermarkets which are projected to be serving about 10 million customers monthly.