Africa’s biggest grocery retailer, Shoprite, has announced its plan to exit Nigeria, the continent’s most populated country and biggest economy, after 15 years in the country.
Consequently, the South Africa, Cape Town-based retailer said it has started a formal process to consider the potential sale of all or a majority stake in its supermarkets in Nigeria..
ALSO READ: Dubai Crown Prince pays hospital bills of Nigerian mother stranded with quadruplets in UAE hospital
In an “Operational and Voluntary Trading Update (52 Weeks Ended 28 June 2020)” released on Monday, Shoprite said it has been approached by “various potential investors”.
The company’s update partly read: “Despite difficult circumstances, in a year incorporating the COVID-19 lockdown and accompanying regulations governing trade, transport and operations, the Group increased total sale of merchandise for the 52 weeks to 28 June 2020 (including the impact of hyperinflation in the prior year) by 6.4% to approximately R156.9 billion. Like-for-like growth for the year was 4.4%.
“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.”
Before Shoprite announced its decision to halt its business transactions in Nigeria, other South Africa-based businesses who had opened up spaces in Nigeria, such Mr Price, recently exited the market after Woolworths did the same six years ago.
In the statement, Shoprite said 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.
Shoprite also said as a result of lockdown, customer visits declined 7.4% but the average basket spend increased by 18.4%.