Choppies Group, the prominent grocery retailer, has experienced a notable boost in its financial performance for the half-year ending December 2024. The company reported retail sales revenue of P4.7 billion, alongside a gross profit of P965 million for the last six months of the year.
Listed on both the Botswana and Johannesburg Stock Exchanges, this fast-moving consumer goods (FMCG) retailer is engaged in various sectors, including milling, manufacturing, and financial transactions. Recent financial results reveal a surge in retail sales revenue, rising by approximately P800 million from P3.9 billion in the last half of 2023 to P4.7 billion in the same period of 2024. Gross profit also saw an increase, climbing from P813 million to P965 million, reflecting an improvement of P152 million.
During the period from June to December 2024, the Choppies Botswana division led the charge with retail sales revenues of P2.9 billion, followed by Choppies Zambia at P715 million and Choppies Namibia at P442 million. This growth was fueled by the opening of 26 new retail stores and inflationary pressures. The company achieved a 14.5% increase in volume and a 3.7% rise in prices, with approximately 2.5 million customers visiting 277 Choppies stores weekly across Botswana, Zambia, and Namibia.
The financial results underscore Choppies Botswana’s resilience and robust performance, despite a challenging economic climate and stiff competition within the local retail sector. “Sales increased to BWP 2,905 million (2023: BWP 2,505 million), supported by volume growth of 13.0%, price inflation of 3.7%, and six new stores,” the company stated. EBITDA and Adjusted EBITDA rose by 8.8% and 11.0%, respectively, even as gross profit growth lagged behind rising costs. “The gross profit rate reduced compared to last year due to competitive pressures. Costs were driven by new stores and inflation. The new stores opened over the last 12 months need time to reach full potential. Overall, we are pleased with the strong performance resulting from good in-store execution, improved customer engagement, and enhanced availability due to inventory optimization,” commented Choppies Group management in their financial results report.
Choppies Zambia, the second-largest contributor to the Group’s revenues, posted retail sales revenues of P715 million, surpassing the P636 million recorded during the same period last year. Choppies Group management expressed optimism about the segment’s performance, highlighting a sales growth of 12.4% and the potential for future profitability. Six new stores were inaugurated during the reporting period in Zambia. “We are confident that this segment will generate taxable profits soon,” they noted.
In Namibia, Choppies experienced significant growth in retail sales revenue, with a remarkable 51% increase. Management indicated that profitability is on the rise as new stores reach their full potential. “There has been a marked improvement in the gross profit rate as we are more precise in our promotional activity, and we completed the implementation of our inventory optimisation system during the last quarter and will start seeing the benefits of better managed availability in the balance of the six months of financial year 2025,” they stated.
The Choppies liquor segment, operating under the Liquorama brand, faced increased competition from both liquor retailers and wholesalers during the last six months of 2024. Additionally, stockouts in beer due to supplier constraints affected performance. However, the company anticipates stronger results in the segment from January to June this year, thanks to effective promotional activities and recent improvements in stock availability.
Despite achieving higher revenues and gross profit, Choppies Group management acknowledged a decline in gross profit margin, attributed to fierce competition in Botswana’s FMCG sector and the liquor retail industry. They cautioned about ongoing uncertainties that could affect future financial results. “We expect continued uncertainty in our business and the Southern African economy due to the duration and intensity of global credit conditions, military conflicts in the Middle East and Ukraine, slower economic growth, surging prices for energy and commodities, renewed supply-chain disruption, financial market volatility, volatility in employment trends and consumer confidence, all of which may impact our results,” the management warned.
