South African retailer Shoprite Holdings today (3 March) hinted the company was likely to quit India over frustrations at the rules governing foreign ownership of local businesses.
Shoprite, which first entered India six years ago and at present has only one store in the country, in Mumbai, and is mulling whether to leave the market, a spokesman told just-food.
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However, the spokesman said he believes Shoprite was set to decide to quit the market with Indian laws prohibiting direct ownership of consumer-facing stores holding back the company.
“I don’t doubt that they will close [the store] but at the moment they are still considering it,” the spokesman said.
The likes of Wal-Mart and Tesco have formed wholesale cash-and carry ventures with local players like Bharti Enterprises and Tata Group.
However, the Shoprite spokesman said the company’s management had been left “frustrated” while it waited for the Indian government to relax regulations on foreign ownership.
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By GlobalData“They haven’t been able to grow to the extent that they wanted to,” the spokesman added.
