Foremost South African retail outlet, Shoprite International Limited, has announced earlier today that it is considering a potential divestment from its Nigerian operation – Retail Supermarkets Nigeria Limited.
This was disclosed in the company’s latest operational and voluntary trading update which was published this morning.
Shoprite Nigeria is reported to have been struggling in Nigeria in recent years owing largely to increased competition and government policies such as border closures and local production of consumables.
Meanwhile, Shoprite is not the only South African company that has recently announced exit from Nigeria; Mr. Price, another South African company, has earlier announced their exit from Nigeria to focus on the South African market – has led to the closure of 4 out of its 5 retail outlets in Nigeria.
Unfortunately, Nigeria’s ‘difficult’ business environment has been blamed for these major divestment.
Shoprite has spent 15 years in Nigeria and it was noted that customers visit for the year has declined by 7.4% due to the pandemic lockdown.
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.
“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,” the statement from the company reads in part.
