Shoprite set to sell off its Nigerian operations
Popular South Africa retail outfit, Shoprite, has announced her consideration of a formal process to sell-off its operation in Nigeria This was disclosed in the company’s operational and voluntary trading update that was published this Monday morning
Part of the statement reads;
“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 as a discontinued operation when Shoprite reports its results for the year. Any further updates will be provided to the market at the appropriate time”
According to a report by Nairametrics in April, the South African retailer has been struggling in Nigeria recently, and has lost 8.1% of sales in 2019, which was related to the September 2019 xenophobic attacks.
The company has spent over 15 years in Nigeria. Its reports reveal that customer visits for this year declined by 7.4% due to the pandemic lockdowns. It also noted that outside South Africa, sales only increased by 0.1%, and an overall decline in sales of 1.4% for the year.
This means Shoprite joins two other South African retailers, Mr. Price and Woolworths to announce their departure from Nigerian business in the past four years. A financial analyst reacting to the development believes, “the Nigerian government needs to address the worsening business environment for retailers, as this shows the purchasing power of Nigerians has taken a hit with the poor business environment”.