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Botswana’s Choppies Wants To Model U.S. Grocer Trader Joe’s As It Expands In Africa

Botswana’s Choppies Wants To Model U.S. Grocer Trader Joe’s As It Expands In Africa

Choppies Enterprises, a dominant supermarket chain in Botswana with a growing private-label offering, plans to expand in six sub-Saharan African countries and become like U.S. grocer Trader Joe’s, its CEO told CNN.

The goal is to have 200 supermarkets by end of 2016 and become a “pan-African retailer of substance and size,” said CEO Ramachandran Ottapathu.

By mid year, Choppies operated 129 stores in three countries — South Africa, Zimbabwe and Botswana. The company, which listed on the Johannesburg Stock Exchange in May, plans to open more stores or buy existing ones in Zambia, Tanzania and Kenya, Bloomberg reported, according to BusinessDayLive.

In Botswana Choppies stores, about 20 percent of products are private-label and growing.

Choppies wants to model U.S. Grocer Trader Joe’s, Ottapathu said. A privately held chain of specialty grocery stores, Trader Joe’s carries a large range of private-label products, organic and fresh food, and produce.

“I’d like to see Choppies closer to Trader Joe’s in the U.S.,” Ottapathu told CNN. “Trader Joe’s has the best private-label offering and high value for money — the same thing we offer — the best value for money.”

The company started out relatively slowly. In South Africa, the first store opened four years ago and the company started expanding aggressively two years later. Now it operates 37 stores in South Africa and plans to have more than 60 in the next 18-to-20 months.

“In South Africa, it’s very competitive, but we have been competing in Botswana with these other chains (Checkers, Pick ‘n Pay, Shoprite, Spar, among others), so we are used to it,” Ottapathu said in a BusinessDayLive report.

So what’s the key to Choppies’ aggressive growth?

“A great team of people with a single mission of getting this thing done,” Ottapathu told CNN.

Its one thing to have dominance at home, and another to take on heavyweights across Africa like Spar and Shoprite. How confident is Ottapathu taking them on?

“We came from nothing” he told CNN. “We grew this business from zero by competing with South African chains. We proved it can be done.”

Choppies has earned a reputation in Botswana for muscling out smaller local stores that can’t compete for price, according to CNN.

Here’s how Ottapathu responds to that: “Choppies only owns 34 percent of the market in Botswana. It doesn’t operate alone in any town in Botswana except one. You need to identify your niche, concentrate on that and make sure you differentiate yourself from other operators.”

Botswana has been a key part of the Choppies story and a stable environment has “been everything,” Ottapathu said.

In Zimbabwe, Choppies said it complied with country’s indigenisation and empowerment law requiring foreign-owned companies to give at least 51 percent of ownership to locals, the ZimbabweIndependent reported.

Zimbabwe Vice President Phelekezela Mphoko owns an interest in Choppies and leads the local Choppies consortium, according to Choppies.

Choppies entered the Zimbabwe market in 2013. Most of its stores were acquisitions of existing Spar stores. A year later it opened a distribution center in Zimbabwe, signaling its plans to grow the business.

Wayside supermarket, the first Choppies store, opened in 1986 in Lobatse, a small town in Southeast Botswana, 70 kilometers south of the capital Gaborone. In 1993, a second store opened in the same town, according to the Independent.

Choppies had no plans to expand beyond sub-Saharan Africa, Ottapathu said, according to BusinessDayLive.