- Tsaone Segaetsho
Retail group Choppies has reported a subdued financial performance for the six months ended 31 December 2025, with profitability weighed down by a confluence of structural and macroeconomic pressures, including the implementation of a living wage.
The group expanded its footprint during the period, opening 25 new stores and creating 626 jobs. However, management noted that these outlets are yet to reach operational maturity, placing additional pressure on margins during the ramp-up phase. The introduction of the living wage further elevated the cost base, compounding profitability constraints.
In an interview with The Executive Botswana following the release of the results, Chief Financial Officer Minesh Rajcoomar said earnings were adversely affected by weakening consumer liquidity, largely driven by Botswana’s diamond market downturn.
“Another contributing factor was the devaluation of the pula in July last year, implemented to mitigate economic strain stemming from a severe contraction in the global diamond market,” he said.
Rajcoomar added that constrained consumer spending, linked to government austerity measures, as well as a rising inflationary cost base, further dampened performance.
Regionally, the group faced additional headwinds. In Namibia, margins were affected by government-subsidised commodities, while in Zambia, deflation in key food categories, driven by an appreciating kwacha, placed downward pressure on prices. Management also cited heightened promotional intensity in an already constrained consumer market as a drag on profitability.
Despite these challenges, topline performance remained resilient. Retail sales increased by 8.9% to BWP 5.09 billion (2024: BWP 4.68 billion), supported by new store openings, inflationary pricing and volume growth.
“Choppies segments achieved volume growth of 3.8% and price growth of 7.1%, while like-for-like sales increased by 2.9%,” management said.
Gross profit, however, reflected margin compression, declining by 0.8 percentage points to 19.8% (2024: 20.6%), with all segments, excluding Liquorama, reporting lower margins. Liquorama recorded an improvement in gross margin from 12.3% to 13.6%.
In absolute terms, gross profit rose by 4.4% to BWP 1.01 billion (2024: BWP 965 million), underscoring the group’s ability to grow earnings despite a challenging operating environment.
Operating expenses increased by 9.1%, driven by the expansion of the store network, inflationary pressures, the derecognition of payables, and prior-year losses associated with business disposals.
Choppies currently operates 302 stores across Botswana, Zambia and Namibia, serving approximately 2.5 million customers weekly. The group generates annual revenue in excess of BWP 9 billion and employs more than 11 000 people, competing across formal retail, wholesale and informal market segments in both urban and rural economies.
