Choppies

History

Choppies was founded in 1986 with one supermarket named Wayside Supermarket (Proprietary) Limited in Lobatse by the Chopdat family, with a second store opening in 1993.

Since 1999, when the company only had two stores, the management team, which included the founding members of Choppies Mr Farouk Ismail (Current Deputy Chairman) and Mr Ramachandaran Ottapathu (Current CEO) (who are both also the major shareholders with each holding 34.2% of the shares), the company executed aggressive growth, consolidating the group into one structure in 2003 (previously franchising under different names) to become the dominant leader in the fast-moving consumer good industry in Botswana.

Due to its exponential growth since 1999, demand for the company become listed on the nation's stock market eventually took its toll on the management team and the company became listed on January 26, 2012. The company hired Grant Thornton to manage the administration front of the firms's Initial Public Offering, with 1.2 billion shares being listed at an offer price of BWP 1.15 per share, with 25% going into the hands of the public. The IPO was the largest on the Botswana Stock Exchange raising P350 million in both the IPO and the private placement, with the shares being oversubscribed by up to 400%.

Operations

The South African operations are executed through a wholly owned subsidiary Choppies Supermakets SA (Proprietary) Limited, which operates in the Limpopo, North-West and Free State provinces.

Distribution and supply - Choppies' distribution centres function as a central sourcing for Choppies stores. The company's top 200 products are delivered in bulk to the distribution centres and then distributed from there to the stores. Other products are delivered from the source to the stores directly. Choppies operates two distribution centres in Botswana; one in the International Commerce Park in Gaborone, and the other in Lobatse. A new 10,000m² South African distribution centre opened in September 2012 in Rustenburg to serve the South African stores.

Welldone (Proprietary) Limited, a wholly owned subsidiary of the Choppies Group, is a logistics company that supports the day-to-day operations of the stores. The company has a fleet of 245 commercial vehicles which distributes products to all Group stores. The fleet of vehicles are all branded with the Choppies logo.

Corporate affairs

The company is based in Lobatse, with the headquarters and the executive management team operating in Gaborone,Botswana. The Choppies Gaborone distribution centre is located in the Gaborone International Commerce Park, where a number of other multinationals and corporations are based.

The company's Board of Directors are as follows:

Store types and product ranges

The Choppies Group operates hyper stores and super stores depending on their respective sizes, selling over 45,000 different products. Choppies sells both branded and own-brand products, primarily packaged and long-life foods.

Marketing and branding

The company's main competitors include retailers SPAR, Pick N Pay, Woolworths Foods, Shoprite and small local general dealers. The Group has a current market share in Botswana of 30%, according to an independent survey conducted by Briggs and Associates. Eventhough there are many competitors Choppies has managed to expand to some African countries starting with South Africa where it is in tough competition with its rivals it is still the preferred retailer giving it an upper hand that is why it is able to explore foreign markets.

Corporate social responsibility

In September 2012, the company received the Presidential Order of Meritorious Service for its contribution to the Botswana society. This honour was awarded to the Group due to a number of charitable initiatives, including:

1. Building a clinic in Eretsha
2. Completing 5 houses in Etsa under the presidential housing appeal
3. Constructing 5 destitute houses in Lobatse under the presidential housing appeal
4. Contributing on a large scale to the Lady Khama Charitable Trust
5. Employing 146 Physically Handicapped people
6. Donating food hampers to the Botswana Defense Force

All bringing the total CSR expenditure for the year 2012 to just over P4 million.

Criticism

Choppies has attracted criticism from the public in the past due to salary discrepancy. Employees such as cashiers and packers claim to earn less than P900 a month, whilst executives such as the CEO and Deputy Chairman earn more than P30 000 000.00 per annum. This has attracted outrage as the company is historically very profitable yet is not rewarding the lower-skilled workers on terms they consider fair to their efforts; in 2011 the Group made over P124 million in after-tax profits, with a dividend in excess of P121 million being paid out to shareholders.