Shoprite Leaves Nigeria After 15 Years!

Shoprite Leaves Nigeria After 15 Years!

While presenting its operational and voluntary update for 52 weeeks ended June 28, 2020, Africa’s retail giant Shoprite has declared it is leaving Nigeria 15 years after it began operation in Africa’s most populous country.

In a statement on Monday, the Cape Town-based retailer said it has begun a formal process to consider the potential sale of all or a majority stake in its supermarkets in Nigeria.

The company said the results for the year do not reflect any of their operations in Nigeria as it will be classified as discontinued operation.

“Following approaches from various potential investors, and in line with our re-evaluation of the group’s operating model in Nigeria, the board has decided to initiate a formal process to consider the potential sale of all, or a majority stake, in Retail Supermarkets Nigeria Limited, a subsidiary of Shoprite International Limited. As such, Retail Supermarkets Nigeria Limited may be classified a discontinued operation when Shoprite reports its result for the year,” the statement read.

 

From available reports, the International supermarket (excluding Nigeria) contributed 11.6 per cent to group sales, and reported 1.4 per cent decline in sales from 2018. South African operations contributed 78 per cent of overall sales and saw 8.7 per cent rise for the year.

Due to the coronavirus-induced lockdown, customer visits declined 7.4 per cent but the average basket spend increased by 18.4 per cent.

 

See full Report: Shoprite Operational and Voluntary Trading Update

 

This is not all together surprising. In 2018, few months after opening its 25th Nigerian store  Shoprite revealed that it will not be opening any more outlets in the country for the time being.

Speaking in 2018, Shoprite CEO Pieter Engelbrecht, “We had to impair four loss-making stores in Nigeria… we have slowed down in terms of our expansion until we get better clarity in terms of banned products and foreign exchange fluctuations.” He added that the chain’s Nigerian supermarkets were currently only carrying “half of our ranges because of the products banned.” The products affected by import bans include rice, flour and frozen meat.

There were two main factors behind these restrictions on imports – a shortage of foreign currency and a desire to boost domestic food production. But with domestic production unable to meet demand, smuggling is flourishing and the prices of staple foods rising, it was only a matter of time. The Covid 19 Pandemic may have only added fuel to an already inflamed situation.

Whilst we wait to see how the potential sale of all or majority its assets unfold, the implications for the emerging Nigerian retail sector are very high – huge opportunities for some and challenges for others. One can only hope that the opportunities outweigh the challenges.

Shoprite Leaves Nigeria After 15 Years!

News Reporter

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