Food Lovers Market stores in Botswana may soon be in the hands of long time retail players, Spar chain of supermarkets.
Employees at the relatively new retail supermarket which operates two stores in Gaborone were served with a memo this week informing them of the impending change that is expected to take place by May 1.
Although he was reluctant to shed more details on the supermarket’s change of ownership, Food Lovers Market General Manager Dirk Burger said some of the Directors were tired of retail business, hence the decision to sell.
He further assured employees that they did not need to worry about their jobs as the sale conditions favoured them.
“The agreement has always been that whoever will be buying the business will have to take the workers too, so they don’t have to worry about losing their jobs,” he said.
A major tenant at Gaborone’s Railpark mall, Food Lovers Market brought excitement among consumers when it opened for business four years ago.
Viewed as the next step in the evolution of Fruit & Veg City, the supermarket which also provided a modern eatery that offered a range of gourmet foods brought a whole difference to the local retail craze.
Within two years another branch was opened at the newly built North Gate mall, but that was only how much the company could grow in as far as the local market is concerned.
Dirk Burger is not so certain about the exact cause of the decline in business, but he admits that the business may have been too big for the local market.
“It’s hard to tell, but the business has survived and done well in South Africa where there is more competition than here.
We cater more for the middle to higher income sort of market.
That is why we have done so well is South Africa because it is a kind of market where you easily find about five thousand millionaires living in a 5km2 area and they don’t care how much they pay, unlike here where the market is more price sensitive,” he observed.
The other reason, Burger admits, could be tight competition from other more established local retail businesses such as Choppies who are also an anchor store at the Railpark mall.
“Everyone here knows the origins of Choppies and, apart from the belief that the prices are much more affordable, they easily relate with the store especially with their corporate social responsibility initiatives.
You need to build your brand first and sacrifice a bit of gross margin, but we don’t have that kind of money.
It is getting more and more difficult for small groups to make it in this environment,” he added.
Senior Retail Operations Manager at Spar, Ken Darby, confirmed the latest development but said it was not yet concluded as they were still awaiting approval from the Competition Authority.