Sourcing fresh produce locally is still a major challenge in some African countries for retailers such as Shoprite.
“There are African countries where we have to import fresh eggs into the country. You can’t source it locally,” said Christo Wiese, chairman of pan-African supermarket group Shoprite, at the recent Ernst & Young Strategic Growth Forum in Cape Town.
Last year How we made it in Africa reported that fast-food chain KFC faced the same challenges. “In one or two of our geographies… we haven’t got suitable lettuce production, and as a result, our burgers don’t actually have lettuce on them,” said Keith Warren, managing director of KFC Africa at the time.
Wiese, however, noted that some countries, such as Zambia, have made significant progress in this regard. When Shoprite first opened in Zambia in 1995 it had to import all its fresh produce. “Today in Zambia, 80% of all the fresh produce sold in our stores in Zambia, come from Zambian producers.”
Wiese said that greater intra-African trade is needed to really kick-start the African consumer story. “It is still a very sad fact that of all African trade, less than 15% is intra-African. And you know it is trade that makes economies grow, and that creates the consumer that you want.”
Wiese, who is also chairman of clothing retailing group Pepkor, said that African countries should make it easier for foreign investors to bring in their own staff. “To go and build a modern supermarket, first of all requires a huge investment, but requires a very high level of skill to run those. We find it almost impossible in most African countries to get work visas. It is a constant battle to say, ‘but look we are not taking any jobs away, we are bringing people here to get these businesses going that will create jobs’.”
He suggested that African countries should implement a simple rule that allows foreign investors to bring in ten people for every million dollars that they invest.
Wiese also called for “enlightened political leadership” to address regulatory challenges. “Everybody… when they start thinking about Africa, they talk about the lack of infrastructure. Now to build roads and airports and all these good things takes an awful long time, that is the long-term thing. There are things that can be done very quickly that can change the game dramatically.”