Modi acquires Choppies Zimbabwe for US$260,000 after initial US$22 million sale

BULAWAYO – Due to the pressures exerted by Zimbabwe’s shifting retail landscape, Choppies Zimbabwe, which previously operated 30 stores and employed 1,000 workers, exited the local market last year and will now be taken over by Pintail for US$260,000.

Pintail is owned by businessman and Deputy Industry Minister Raj Modi, from whom Choppies initially acquired 10 SPAR outlets for around US$22 million in 2013 to establish its presence in the country.

Choppies explained in a Botswana Stock Exchange notice seen by NewZWire that despite their belief in Zimbabwe’s long-term potential, sustained profitability for their Zimbabwean operations would require significant ongoing investment that the group deems uneconomical at this time.

“While Choppies believe in Zimbabwe’s long-term viability, for the Zimbabwean operations to be profitable, Choppies as a group will need to invest more capital to support its Zimbabwean operations for extended periods.

“Supporting the Zimbabwean operations further will not be economically viable for the Choppies group at this time,” Choppies stated.

This decision comes despite Choppies Zimbabwe holding assets valued at US$2 million in property, plant, and equipment, as well as US$1.4 million in stock at the time of the sale, which has incurred a US$1 million loss for Choppies.

The difficulties faced by formal retailers in Zimbabwe, leading to Choppies’ departure, are largely linked to government exchange rate policies.

These policies force formal businesses to use the official exchange rate, making their goods pricier than those sold by informal traders who often evade taxes and deal in cheaper, sometimes smuggled, goods.

This has created an uneven playing field, impacting major retailers such as OK Zimbabwe Limited, N Richards Group, Spar, and Pick n Pay who have since closed several shops across Zimbabwe.

Choppies had already signaled its withdrawal the previous year, highlighting a substantial transition towards the informal retail sector in Zimbabwe over the past two years.

This shift had caused a decline of up to 30% in customer visits for formal retailers, compounding their struggle to compete with the burgeoning informal market.

Due to the economic challenges facing the country, several listed companies including mining giants have since been placed under corporate rescue status.