South Africa's Shoprite Holdings said that it expects to close or dispose of its remaining two stores in Kenya in the year ahead, leaving the East African country after opening its first store there more than two years ago.
The supermarket chain has been reviewing its long-term options in Africa as currency devaluations, supply issues and low consumer spending in Angola, Nigeria and Zambia have weighed on earnings.
"Kenya has continued to underperform relative to our return requirements," the retailer said, adding its decision to leave had been confirmed by the economic impact of COVID-19.
Shoprite opened its first supermarket in Kenya at Westgate Mall, Nairobi, in December 2018, hoping to take advantage of disarray in Kenya's grocery sector after the collapse of Uchumi Supermarkets and Nakumatt, two of the country's top three retailers.
The decision to leave comes a month after Shoprite said it was considering reducing or selling all of its stake in its Nigerian subsidiary.
Shoprite, with more than 2,300 stores across Africa, reported a 6.4% rise in sales for the year ended June 28, with like-for-like sales up by 4.4% as customers spent more on groceries at its discount Usave and mid-to-upper end Checkers stores.
Diluted headline earnings per share (HEPS), the main profit measure used in South Africa, from continuing operations rose to 765.8 cents against a restated figure of 746.9 cents a year earlier.
"As evidenced by our results, our core business, Supermarkets RSA, made up of Shoprite, Usave, Checkers and Checkers Hyper, remained focused on their respective customer segments and continued to execute on their value proposition," commented Pieter Engelbrecht, chief executive.
"Pleasingly, our South African supermarket business reported 2.3% volume growth, coupled with 16 months of consecutive market share gains up to and including June 2020. It was without doubt a milestone year strategically, with the successful launch of our industry first digital shopping application Checkers Sixty60 and our Checkers Xtra Savings Rewards Programme, which ended the year with 4.7 million customers registered."
Shoprite declared a final dividend of 227 cents per share.