Regional supermarket chain Choppies has exited the Zimbabwean market, citing the hostile economic environment in the Southern African country, characterised by currency instability and the collapse of formal businesses.

Choppies, founded in Botswana and with stores in four southern African countries, entered Zimbabwe’s retail market in 2013. It also has operations in Zambia and Namibia.

Choppies exited Kenya in 2020 after its business routinely ran at a loss.

In Zimbabwe, it bought stores from businessman Raj Modi, who is now Zimbabwe’s Industry and Commerce deputy minister. But Choppies said the Zimbabwe Gold (ZiG) currency introduced in April 2024 has been unstable, making the business environment unfriendly.

Mr Modi, through his SaiMart, has since retaken a portion of Choppies’ 30-store network for an undisclosed amount.

In a notice to suppliers on the transition, Choppies said: “Kindly note that business operations will continue as normal. All local staff and management have been moved to SaiMart.”Mr Modi said the Choppies' business model would not change in Zimbabwe and they were expecting to expand their footprint.“As SaiMart, we are committed to providing affordable products and making shopping convenient for our customers,” he said.

“This acquisition is a strategic step toward achieving that goal.”Choppies first announced its intention to leave Zimbabwe in November 2024, citing the country’s exchange rate policies that have driven customers away from formal retailers to informal traders.“In Zimbabwe, over the last two years, there has been a significant shift to the informal sector, leaving the formal retail sector to battle a reduction of up to 30 percent in footfall and having to compete with the informal sector,” Choppies said at the time.

The announcement came a month after Zimbabwe’s top retailers warned that most of them faced collapse because of the government’s insistence on the use of an exchange rate that they deemed overvalued and a threat to competitiveness.

In April 2024, Zimbabwe launched its new gold-backed currency ZiG to replace the local unit that had lost almost 80 percent of its value in a couple of months.

Formal businesses are required to set prices based on the official exchange rate of 25.2 to the US dollar, which sells for as much as 40 ZiG on the more widely used parallel market.

The Retailers Association of Zimbabwe (RAZ), which represents most of the country’s biggest retail chains, said the overvalued exchange rate made their products more expensive than those in shops.

Most Zimbabwean consumers now prefer buying their provisions from shops and street vendors who sell their wares in foreign currency -- and often offer more affordable prices -- to supermarkets, which are forced to trade in the local currency.“The situation is clearly untenable and will lead to company closures if authorities do not intervene with policy measures to protect their formal retail sector,” RAZ said in a letter addressed to the Ministry of Finance. “Implementing a pricing model that reflects real-time market exchange rate fluctuations can help us remain competitive while managing costs.”The ZiG, which was Zimbabwe’s sixth attempt at a stable currency since 2019, has lost more than 50 percent of its value less than a year after it came into circulation. Zimbabwe was first forced to dollarise its economy in 2009 due to record-breaking inflation.

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