Africa’s biggest grocery retailer, Shoprite has announced plans to exit Nigeria, the continent’s biggest market, after 15 years of opening its first store in the country.
According to a statement by the Cape Town-based retailer, it has started a formal process to consider the potential sale of all or a majority stake in its supermarkets in Nigeria.
The megastore company with presence in virtually all states in Nigeria hinged this decision on the coronavirus pandemic which has disrupted major businesses globally.
It stated that it has been approached by potential investors willing to take over its Nigerian operations.
This was contained in the company’s “Operational and Voluntary Trading Update (52 Weeks Ended 28 June 2020)” released on Monday.
The statement partly 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.
Shoprite also said the results for the year do not reflect any of their operations is Nigeria as it will be classified as discontinued operation.
International supermarkets (excluding Nigeria) contributed 11.6% to group sales, and reported 1.4% decline in sales from 2018. South African operations contributed 78% of overall sales and saw 8.7% rise for the year.
As a result of lockdown, customer visits declined 7.4% but the average basket spend increased by 18.4%.
The announcement by ShopRite comes months after another South African brand, Mr Price, exited Nigeria.
