South African supermarket group Pick n Pay announced today that it had signed a franchise territorial agreement with retail franchising group Retail Masters in Mozambique to further extend its African footprint.
According to Dallas Langman, head of Pick n Pay’s Group Enterprises division, the company plans to open its first store in March 2011. “We have signed a Master Franchise Agreement with Retail Masters for Mozambique which will provide us with the essential benefit of expert insights into the local market,” Langman said.
Opening in Maputo, the first Mozambican store will be approximately 3,000m2 in size. Pick n Pay envisages opening a further three stores before the end of 2011. The first four stores will open in the greater Maputo district.
Pick n Pay has concluded successful investigations across the length and breadth of Mozambique. “We have identified numerous opportunities for further sites and we see enormous potential in the country which we believe is considerably under-penetrated in terms of the kind of retail offering we will provide,” said Langman.
“It’s our intention to ensure that local farmers and suppliers are supported to stimulate and assist economic growth in Mozambique. Logistically, we’re using experts who deal with transportation and supply issues into Africa and currently service our Zambian operations.”
“Naturally one of the main benefits to the local economy will be employment. In addition we are fortunate in our partners to have local ownership which means we will be able to leverage highly experienced local market knowledge and expertise.”
Pick n Pay’s expansion into Mozambique follows its first store opening in Zambia in July. The group also recently announced the purchase of a further 24% of Zimbabwean operation TM Supermarkets, increasing its shareholding to 49%.
Pick n Pay’s strategy into Africa has mainly been through partnering with locals and the franchise route, where local experts own the franchise in their own communities. However, there are instances such as with its first store in Zambia, where the company will develop corporate-owned stores.
Throughout Africa, Pick n Pay currently operates one store in Zambia (four due to open in 2011), seventeen stores in Namibia, twelve in Botswana, seven in Swaziland and one in Lesotho, together with its fifty-one-store network with TM in Zimbabwe.