Shoprite, one of Africa’s biggest grocery retailer, has announced plans to leave Nigeria after 15 years, TopNaija reports.
The Cape Town-based retailer has started a formal process to consider the potential sale of all or a majority stake in its supermarkets in Nigeria, it said in a trading statement for the 52 weeks to end June, which was released on Monday, August 3.
Bloomberg reports that Shoprite is considering selling its Nigerian operations. This process was initiated after the retail chain said in November that it was reviewing its supermarket operations outside South Africa and would consider exiting certain countries if that would help reverse regional sales declines.
Shoprite has been battling currency-induced inflation surges in several other African countries. 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 the COVID-19 lockdown, customer visits declined 7.4% but the average basket spend increased by 18.4%. This comes just weeks after it was revealed that another popular retail store, Mr. Price Group, is making plans to close its Nigerian business to focus on its home market business in South Africa.
This decision has generated reactions from Nigerians on social media who expressed worry over the increase in unemployment rate. Some described the planned exit of Shoprite as a negative scorecard which may discourage international investors from Nigeria.
Here are some comments gathered by TopNaija from Twitter:
@Dammiedammie35 “ So Shoprite is leaving Nigeria, thousands of people will be without jobs now, other thousands depending on those people’s incomes, my new neighbor works with Shoprite in Ibadan and he has three kids, his wife is a private school teacher and haven’t worked in a while, so many people like that.”
@Sirleodasilva “ No economic plans, just vibes, copy and paste from other countries. This is what happens when the best minds are not the ones leading your country. The economic ignorance will kill businesses or their policies will do so. I just hope Shoprite jobs will not be all lost.”
@Olisinho_ “ The business is not closing down, another consortium will buy it and continue business but probably some jobs might be lost as there would be downsizing to hasten profitability and getting back on the right track.”
@Morris_Monye “ Cost of doing business is so high in Nigeria. You provide your own power, your own water etc. Costs just keeps getting higher and higher.
“The unfortunate thing about this Shoprite debacle is the huge loss to staff, contractors and supplier. An unfortunate domino effect.”
@Biyitheplug “ As Shoprite is leaving Nigeria, a lot of Shoprite workers will remain unemployed, most won’t get a new job anytime soon, how will a married man feed his family? Only the strong hearted survives in this country to be honest.”
@BrainJDennia “ After 15 years Shoprite is leaving Nigeria following the footsteps of Mr Price.
“Over 3000 direct jobs and over 17000 indirect jobs will be lost. Nigeria is a destiny killer.”
@Ayobankole “ The Board of Africa’s biggest retailer, Shoprite, has announced plans to discontinue operations in Nigeria after 15 years in. While this may open up opportunities for local investors in that sector, it is a bad pointer to what Nigeria has become as an investment destination.”
@Wiseeyeq “ Shoprite is leaving Nigeria because Nigerians now have less disposable income to spend at their outlets than before. Poverty is creeping on us all while our Supreme Leader idles and his minions demand we “live within our means”
@More_jnr “ Power is the major problem, diesel is so expensive and Shops like Shoprite has to run on Generator all through.It is very expensive.”
@Ayemojubar “ Shoprite plans to discontinue operations in Nigeria. Well this sounds good for locals but a negative scorecard that will discourage foreign investments in this country.”
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