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Pep expected to invest R16 million opening its first three stores in the fastgrowing Angolan market during the current financial year, the mass-market retailer said yesterday.

By Tom Robbins Cape Town – Pep expected to invest R16 million opening its first three stores in the fastgrowing Angolan market during the current financial year, the mass-market retailer said yesterday. Pep is making the investment, which includes a distribution centre, in the hope of profiting from growing oil revenues and foreign investment in the formerly war-ravaged state. Pep managing director George Steyn said the stores would be centred in the south of Angola. The firm planned to build a network of stores to achieve the economies of scale required when setting up a distribution system. “If we can’t get 25 to 30 stores in a country within two years, we should pass on a country,” he said last week. General merchandise retailer Massmart, with its large-format Game stores, has preferred to open one store per African country. Last month UK research company Planet Retail said it expected Shoprite – to date, one of the most aggressive South African retailers on the continent – to shift its African focus to resource-rich countries such as Angola and Nigeria.

Gryphon Asset Management chief investment officer Abri du Plessis said yesterday that with reported economic growth rates in excess of 10 percent, there was an expansion in Angola’s consumer base, creating opportunities for retailers.

The bulk of the country’s consumers were probably in the Pep target market, Du Plessis said. He added that improvement to the country’s infrastructure, such as roads, would make logistics easier.

Steyn said that outside the Southern African Customs Union countries, such as Namibia and Botswana, Pep also had plans to grow its trading space in Mozambique, Zambia and Malawi.

Pep has 78 stores in these countries out of a total of 1 350 in the chain.

Steyn confirmed that in South Africa, Pep was talking to credit provider Capitec about locating branches close to stores.

He added that the two had the same target markets.

Pep had no intention of providing credit to its customers, because with its core bottom-end market, it would have to turn away many applicants, which would damage its brand.