Shoprite: Africa’s Largest Supermarket Plans to Exit Nigeria

South African Company, Shoprite Holding Limited, says it is considering pulling out of Africa’s most populous country, Nigeria. This is the latest South Africa to leave the country, considering Mr Price announced its exit in June and Woolworths in 2014.

This decision comes at a time where the coronavirus has disrupted businesses on a global scale, and Nigeria’s economy, in particular, is struggling due to the plunge in global oil prices and currency-induced inflation.

In an Operation and Voluntary Trading report released by the company on Monday, it stated, “Following approaches from various potential investors, and in line with our reevaluation 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 majority stake, in Retail Supermarkets Nigeria Limited, a subsidiary of Shoprite International Limited”.

Shoprite employs about 2,000 Nigerians and partners with several vendors around the country. This transition can have a significant impact on the livelihood of many.

In an analysis by Nduka Orjinmo of BBC, Lagos, although Shoprite is a working-class supermarket in South Africa, it is for the upper class in Nigeria. Shoprite is more popular for taking pictures than actual shopping among average Nigerians. The difficult economy and global pandemic have crippled the spending power of many and although they want quality services, they want it cheap.

Shoprite entered the Nigerian market in 2005, and has, over the years, expanded to over 25 stores across 8 states. However, the past few years have been tough.

Just last year, the retailer’s major stores in Lagos and Abuja became a flashpoint of violence, following a series of xenophobic attacks against Nigerians in South Africa, as many youths picketed Shoprite’s branches. Moreover, the rise of indigenous brands like JustRite, Ebeano, Hubmart, and Globus has considerably shrunk their market share. As potential investors are interested in taking over Shoprite’s operations in the country, the company has expressed its willingness to part with a majority stake in its Nigerian subsidiary or even an outright sale.

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Emmanuel Oyedeji

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Emmanuel is a voracious reader and writer. He obtained his BSc in Engineering in 2016 before realizing his penchant for writing and entrepreneurship. Over the years, he has written hundreds of blog posts and is currently working on his first book. You can follow him on the links above and below.

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