Carrefour: new stores in Cameroon and Uganda; problems for Shoprite?

Carrefour is set to open its 4th store in Cameroon on the 17th November and its second store in Uganda in December. The 3000m² Cameroon store, in Douala’s Grand Mall, will be its 3rd and largest outlet in the city. Its new Uganda outlet will occupy 3,400m² in Kampala’s Metroplex Mall, a site that previously housed defunct Kenyan supermarket chain Nakumatt.

Carrefour’s West Africa partner CFAO opened the first Carrefour store in Cameroon in December 2017. The company says that more than 70%” of the turnover of its Carrefour Market brand is derived from products purchased from Cameroon, more than half of which comes directly from Cameroonian agriculture, fishing, livestock and food processing businesses. It now works with 250 farmers in the country. Previously, the retailer has been the focus of political opposition from nationalist groups such as Croire au Cameroun, concerned about the influence of foreign conglomerates on local businesses.

Douala Grand Mall is the most prestigious mall in Cameroon to date and is billed as the largest shopping mall in Central Africa. When opened it will have 18,000m², a 5 screen cinema, 160 shops 22 restaurants and  CFAO’s Carrefour Market as an anchor tenant. Phase 2 of construction will see a 5 star luxury hotel and business park.

In Uganda, Carrefour franchisee Majid Al Futtaim has long planned the opening of its second store following the delayed arrival of its first store in Kampala’s Oasis Mall. The Metroplex Mall store, in the Naalya area of the capital, will open in time to serve higher demand for Christmas. However, we also hear that Majid Al Futtaim may accelerate its opening plan for three further stores, which were scheduled to open at some point before the end of 2023.

We think, if it happens, the acceleration will come because Tuskys, which had five outlets in Uganda, is on the ropes. We understand that it has told suppliers in Kenya it cannot pay them and Kenyan media is reporting more landlords taking possession of stores and auctioning their contents to pay off debt. It is inevitable that Tuskys will formally exit Uganda.

There may also be another factor in Majid Al Futtaim’s thinking: in June, Ugandan Finance minister Matia Kasaija raised import duties on some food products to between 35% and 60%. Goods coming from Kenya and other East African Community (EAC) sources are unaffected. Goods from South Africa, inevitably a major source of supply for Shoprite, are subject to higher import duties. When Shoprite announced its exit from Kenya in September this year we speculated whether it might also decide to exit Uganda. Shoprite exited Tanzania in 2014.

Shoprite entered Uganda in 2000 but has made only modest headway. It has five stores in Uganda, the last of which opened in 2018. So far, CEO Pieter Engelbrecht has not formally mentioned Uganda either way, as a market to stay in or one to exit. To its west, Shoprite is expanding in DRC, based on strong predictions for DRC’s mining sector and the growth of demand for metals used in electric vehicle batteries. We will have to wait and see how results from the second half of 2020 are affected by changes in import duties.