Conflicting Reports Over Shoprite pulling out of Nigeria
Conflicting reports have continued to trail the alleged plan of Africa’s biggest supermarket chain, South African-owned Shoprite pulling out of Nigeria. One version of the report making wave in the media says it is considering pulling out of Nigeria as another denies it. . It said it was looking at selling all “or a majority stake” of its operations in Africa’s most-populous country. Shoprite is the latest South African retailer to look at leaving Nigeria – clothing firm Mr Price announced its exit in June, and Woolworths in 2014. Shoprite’s decision comes at a time when Nigeria’s economy is struggling amid the coronavirus pandemic. Economists from the World Bank have warned that the oil-rich country could be on the brink of its worst recession since the 1980s because of “the collapse in oil prices coupled with the Covid-19 pandemic”. Shoprite said lockdown restrictions because of coronavirus had affected its operations in 14 African countries, with sales declining by 1.4% in those markets. Its South African operations on the other hand witnessed “significant growth”. The retailer has also been battling currency-induced inflation surges – especially in Nigeria, where it has been hit hardest. The retailer’s stores in the capital, Abuja, and the commercial hub, Lagos, became a flashpoint for outrage in 2019, following violent attacks in South Africa on other migrants from elsewhere in the continent. The student body demanded that all South African-owned businesses leave the West African state. Shoprite’s failure in Nigeria is not surprising, the shiny shopping malls with escalators where its outlets are located are more popular for taking pictures than actual shopping. Though it is regarded as a working-class supermarket in South Africa, most here consider it as catering to the upper classes. Tens of millions of Nigerians are poor or unemployed – and the minority who have the spending power to shop at Shoprite have seen their finances take a battering because of the coronavirus pandemic. These are hard times for businesses, but the slow growth at Shoprite Nigeria predates the pandemic. Consumers here want quality services, but they want it on the cheap.
Meanwhile another report claimed ShopRite Nigeria has debunked the story making the rounds that it intends to close shop in Nigeria. The Country Director for Chastex Consult, Ini Archibong, in a telephone conversation with Vanguard, said: “Shoprite is not leaving Nigeria. “We have only just opened to Nigerian investors which we have also been talking to just before now. We are not leaving, who leaves over a $30billion investment and close shop? It doesn’t sound right. “We only gave this opportunity to Nigeria investors to come in and also help drive our expansion plan in Nigeria. So we are not leaving. “I have tried to say this to many people as I can. There should be no panic at all and all of that. There is no truth in that report.” Recall that reports have been circulating that the retail outlet has started a formal process to consider the potential sale of all or a majority of stake in its supermarkets in Nigeria. The report said the retailer had struggled in the Nigeria market after some South African owned retailer shops exited the Nigeria market. Shoprite debunks exit rumour, says we are not leaving Nigeria The report further stated that Shoprite results for the year do not reflect any of their operations in Nigeria as it will be classified as a discontinued operation. The report also said international markets excluding Nigeria contributed 11.6 per cent to the group sales and reported 1.4 per cent decline in sales from 2018. South African operations contributed 78 per cent of the overall sales and saw 8.7 per cent rise for the years. The report went further to say that as a result of the lockdown, customers’ visits declined 7.4 per cent but the average basket increased by 18.5 percent