South African supermarket group Pick n Pay plans to support local farmers in Mozambique, where it recently opened its first store.
“It is our intention to ensure that local farmers and suppliers are supported to stimulate economic growth in Mozambique,” noted Dallas Langman, head of group enterprises, in a company statement.
Foreign retailers operating in Africa are coming under increasing pressure to buy from local suppliers.
Johan van Deventer, managing director of Freshmark – a subsidiary of pan-African supermarket group Shoprite and responsible for the retailer’s fruit and vegetable procurement and distribution – recently also highlighted the importance of involving the local population. “Local involvement is very important. In Freshmark’s case we prefer to buy local. You must have local support, you must invest local, you must do training,” he told a Cape Town conference.
Situated in the capital Maputo, Pick n Pay’s outlet is 3,500 m2 in size. The store also sells liquor and clothing.
Langman believes that Mozambique holds promising potential for retail. “Based on our comprehensive research and assessment, the Mozambique market offers good opportunities,” he said.
Pick n Pay’s operates in Mozambique through a franchise arrangement. The company has signed a territorial agreement with Mozambican franchising group Retail Masters. Langman said this allows for “expert insights into the local market”.
Pick n Pay’s strategy into the rest of the continent 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 stores in Zambia, where the company will develop corporate-owned stores.
In March this year, Pick n Pay opened its second store in Zambia. The company plans to open five more stores in the country over the next four years. Last year, it also announced the purchase of a further 24% of Zimbabwean operation TM Supermarkets, increasing its shareholding to 49%.