Botswana’s Choppies sees half-year profit fall to $5.6 million as retail pressures mount

Choppies Enterprises, the Gaborone-based supermarket chain led by Botswana businessman Ramachandran Ottapathu, posted 33% drop in profit for the first half of 2026, as rising costs and regional economic pressures weighed heavily on profitability.

Despite the earnings decline, the retailer posted revenue of BWP5.13 billion ($374.9 million), supported by new store openings, higher prices, and increased sales volumes across Southern Africa. The increase was driven by 25 new store openings, inflation-adjusted pricing, and higher sales volumes across its markets.

Revenue rises, margins under pressure
According to the unaudited financial results, Choppies’ retail sales grew 8.9% to BWP5.1 billion ($372.46 million), up from BWP4.68 billion ($342.17 million) in the prior period. Like-for-like store sales increased by 2.9%, while overall volume growth reached 3.8%, supported by a 7.1% price increase.

Gross profit edged up 4.4% to BWP1.01 billion ($73.69 million), but margins slipped 0.8 percentage points to 19.8%, weighed down by higher costs in Botswana, Namibia, and Zambia, offset partly by improved performance in Liquorama. Operating profit fell 20% to BWP152 million ($11,12 million), with adjusted EBIT down 28.9% to BWP145 million ($10.61 million), reflecting rising expenses from new stores, inflation, and wage adjustments.

Net finance costs grew slightly by 1.9% due to higher interest on leases for new stores, while the effective tax rate increased to 22.2%, largely because of deferred tax in Namibia.

Expansion and market strategy
Founded by Ottapathu and Farouk Ismail in 1986, Choppies remains Botswana’s largest retail chain, with a growing presence in South Africa, Namibia, Zambia, and Kenya. The group continues to rationalize its footprint following earlier exits from Kenya, Tanzania, and Mozambique. The company said the current revenue momentum positions it to capture operating leverage as regional economies recover.

Choppies’ total assets grew 4.93% to BWP3.09 billion ($224.23 million), while shareholders’ equity surged 51.26% to BWP301 million ($22.03 million). Meanwhile, accumulated losses shrank 17.92% to BWP403 million ($29.51 million), reflecting improved financial health.

Dividend and outlook
The board declared an interim dividend of BWP0.01 per share, payable on April 29, 2026, reflecting a 25% payout ratio and aligned with the group’s dividend cover policy. Despite short-term margin pressures from regional economic challenges, Choppies is building scale to benefit from long-term growth in Southern Africa’s food retail market.