Author: Daniel K Kalinaki. PHOTO/FILE. What support could we have given local supermarket chain investors to buy out Shoprite or go into business with Carrefour?
South African retailer Shoprite is shutting down its continental footprint, including in Uganda, to concentrate on its home market. It joins a long list of South African and international firms that have burnt their hands in the local market, or simply decided it wasn’t worth the bother.
There was the clothes discounter, Pep, which discovered that it could not outcompete imported second-hand apparel. Before it, another wholesaler in Lugogo, name forgotten, tried and failed to dislodge Kikuubo, the local commodities exchange. Of course our thoughts and prayers continue to go out to the shareholders of Supreme Furnishers, whose managers thought it wise to run a hire-purchase scheme in a country without a national property register or national ID scheme. Needless to say, it ended in premium ocular secretions.
In purely liberal economic terms, Shoprite’s failure is renewal and another’s gain, in this case Carrefour, the French retail chain that is said to be lining up to take over. But there’s more to be said.
When the Shoprite caravan leaves town there will be nothing to show for almost two decades of operations. No known local shareholders, no long-term value, not even a Shoprite Borehole CSR project somewhere in Naguru. Only pictures of ‘Employee of the Month’ strewn in the rubbish dump of corporate failure.
Hopefully they will not leave a trail of unpaid and bankrupted suppliers as the Kenyan retail chains Uchumi and Nakumatt did before, but they will leave nothing. Whatever profit Shoprite made over the years has long been repatriated. It is an open-cast retail mine, to be filled in or ventured into again with a new operator with better digging technology. It does not have to be this way. How about we rethink the nature of local content in the national economy to ensure local contestation, rather than just mere participation? This is not to question the logic of free markets, but to adjust for the inbuilt advantages that some players have, which make the markets free only in name.
Some countries do this by ring-fencing specific sectors of their economies from foreign investment, ownership or control. And here we aren’t speaking of communist Cuba or North Korea, but ‘liberal’ economies from Australia, Canada, to America, India and others. Retail is one such area because of the […]
