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The Latest South African Retailer to Retreat from other African Markets

Shoprite Holdings is considering reducing or selling all of its stake in its Nigerian subsidiary. The company has been reviewing its long-term options in Africa as currency devaluations, supply issues and low consumer spending in Angola, Nigeria and Zambia have weighed on earnings. Shoprite, which owns more than 2,800 outlets across Africa, said in a trading update that it was pursuing the sale after reviewing its operating model and receiving approaches from various investors. The market welcomed the potential exit, pushing Shoprite’s shares to their highest in nearly two months. They were up 11.4% by 1214 GMT. Its shares were also supported by a 6.4% jump in total sales to 156.9 billion rand (6.95 billion pounds) in the 52 weeks to June 28. Shoprite said its annual headline earnings per share (HEPS) could rise despite the impact of 327.2 million rand in COVID-19 costs and impairments of 1.3 billion rand. The retailer said its basic HEPS – the main profit measure in South Africa – from continuing operations are likely to be between 1.6% below and 6.4% above the restated 747.7 cents it reported a year earlier.