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Shoppers store to exit Station Market

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Sefalana Group is planning to relocate Shoppers store from Station Market where it is struggling to make profits, says Managing Director, Chandra Chauhan.

Speaking to the Business Trends, Chauhan said the retail sector has recorded 12 percent growth but some of the shops are struggling. “Although we have this growth, our Shoppers store at the Station Mall is struggling and we are planning to exit that market,” said Chauhan.

He was speaking on the sidelines of the company’s recent announcement of its interim results to October 2015.  He explained that they will not close the shop but they will relocate it to another place. The shop is not making profit but it is breaking even therefore struggling to pay rent.

“We are not making a loss as such but we are breaking even. This is going to become a loss because the rental is expensive. The location of the shop is not in a good place for consumers because most people are now shopping in Rail Park Mall,” said Chauhan.

Chauhan said the retail division is gaining traction in the Botswana market as the number of stores increases an awareness of house brands. Turnover amounted to over P1.2 billion which was 13 percent up on the same period last year and profit before tax amounted to P46, 3 million which was 28 percent up on the prior period. 

Sefalana cash and carry Limited contributed 66 percent and 58 percent of the Group’s revenue and profit before tax for the reporting period. During the period the group opened Shoppers Supermarkets in Mogoditshane and Hukuntsi bringing the current retail outlets to 22 and a total number of Sefalana stores across Botswana to 50.

In November 2015 the group launched Botswana’s first online shopping site, which Chauhan said is receiving positive feedback from customers. “We are pleased to be leaders in the market with this initiative and although still in its infancy, we are receiving a lot of positive feedback from our customers. We are excited about this channel and look forward to seeing this grow as we enter into 2016 and our customer base becomes more sophisticated,” said Chauhan.

He said they continue to seek additional suitable locations for further store openings as they are targeting 70 stores across Botswana.

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‘Manufacturing holds key to economic growth’

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Barclays bank’s economist Naledi Madala has urged the country to consider manufacturing, as a key tailwind to drive the economy and reduce inequality.

She was speaking at a gathering organised by the bank which focused on economic outlook for 2019. “We should not make a mistake of leapfrogging without manufacturing,” said Madala, lamenting that the country’s diversification remains a pipeline dream, as the diamond is still the economy’s mainstay. She bemoaned that mining activities in the country could not spring forward diversification, though non-mining GDP has been steady over the years.

“Extractive industries are not good stepping stones for diversification, the sector does not prepare us for the next step,” said Madala at the Barclays’ Economic Outlook Forum Review 2019. The economist further noted that government should confront head-on challenges of productivity and competitiveness to attract the much needed Foreign Direct Investment (FDI). Though diversification efforts continue to hit a brick wall, Madala said the country should expect increased activities in the mining sector hinged to ramp up in coal production in the year ahead.

She also implored government to consider a welcoming attitude towards foreign investors and generous tax incentives to businesses that set up in the country. Madala is also upbeat that the use of public private partnership model could also help diversify the economy coupled with privitisation. “Privitisation will offer opportunities for growth, through the renewed optimism from government, as business confidence has improved,” said Madala.

She implored the government and the business community to access what is going to drive and hinder growth highlighting that key headwinds to growth are income inequality, diversification challenge and productivity, among others. “The pace of poverty reduction has slowed down, while income inequality goes up,” said Madala

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MINISTER BEWAILS BAD REPAYMENT BY YOUTH

Keikantse Lesemela

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Minister of Youth Empowerment, Sports and Culture Development, Tshekedi Khama has told parliament his ministry continues to face challenges on the repayment of Youth Development Fund (YDF) loans.

Recently presenting the budget to Parliament, Khama said this financial year the ministry has received a total of 2582 YDF applications and approved 983of them to the value of P98 million. He said the programme attracts a high level of interest from youth but the ministry is only limited to funding a maximum of 1200 youth projects annually due to budget limitations.

“However the greatest challenge for the Fund is the repayment of the loan component by the majority of the youth businesses. The youth have advanced number of challenges for this including high rentals for operating spaces, low market access owing to tight competition and limited production capacities,” said Tshekedi, adding that they continue to pursue beneficiaries to repay the loans.

Out of the 919 businesses funded 1058 jobs have been created. The minister highlighted that disbursements of funds will continue to be undertaken until the end of the financial year. “The YDF is currently under review in line with the pronouncement made by the President, Dr Mokgweetsi Masisi in the State of the Nation Address, to improve beneficiaries through training, and encourage consortia and cooperatives,” said Tshekedi.

The ministry assists YDF beneficiaries in marketing their products and services through fairs and exhibitions. The ministry also runs entrepreneurship-training seminars for youth and in the past year 3692 young people were trained. Over 600 youth businesses attended fairs and exhibitions to market their products and services. Currently the ministry is collaborating with Local Enterprise Authority (LEA), First National Bank Botswana and Citizen Entrepreneurial Development Agency (CEDA) on training in entrepreneurship development and mentorship of YDF beneficiaries.

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