South African Company expands further into Africa

South African retailer Woolworths will open 16 new stores in other Africa countries this financial year, it said on Friday, as part of the group’s plan to expand further on the fast growing continent.

Woolworths, which sells high-end food and some clothing, already operates 44 stores in 10 countries that include Botswana and Kenya.

The company said it had formed a joint venture in Tanzania and Uganda and was planning to open three more stores in the two east African countries by the end of the financial year.

Woolworths, whose financial year runs from the beginning of July to the end of June, also said it intends opening stores in oil rich countries such as Nigeria and Angola.

The retailer said it will focus on joint ventures with local partners in Africa, rather than its previous franchise model.

The company, which has no connection to the Australian retailer of the same name, is the latest merchant in Africa’s biggest economy to jockey for a stronger position on a continent that will be home to two billion people by 2050.

Both rivals Shoprite and Pick n Pay have set out expansion plans across the continent as Wal-Mart prepares to push its Massmart acquisition further into the world’s second-most populous continent.

Woolworths said it regarded trading beyond South African borders as “a major opportunity” for growth.

“Consumer spending accounts for more than 60 percent of the African Gross Domestic Product (GDP) and this will increase with the growth of the upper and middle income groups,” said Glenn Gilzean, Woolworths’ director for retail operations.

Shares in Woolworths, which have climbed about 40 percent so far this year, were 0.93 percent higher at 39 rand (US$5.35) by 08:52 EST, outpacing a 0.9 percent decline in the Johannesburg Stock Exchange (JSE) All-share index.

Source: Reuters