This is not the best of times for the popular retail company, Shoprite in Nigeria as the firm struggles to stay afloat four years after the exit of its former South African owner from Nigeria’s retail business.
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Amidst the growing competition in the retail supermarket segment, Shoprite is fast losing its dominance in the space with most of its outlets virtually empty and on the verge of shutting down.
As of the time of filing this report, Shoprite stores in Ilorin and Ibadan have been shut down while checks by Daily Trust at most of their retail outlets that are still open across the country showed virtually scanty shelves.
Shoprite in Nigeria
Since 2005 when the first Shoprite store opened in Lagos, it has become a household name in the retail supermarket segment, as it expanded to eight states including the federal capital territory with no fewer than 25 stores.
Shoprite is a subsidiary of Shoprite Holdings, which is the parent company of the Shoprite brand, a South African company with headquarters in Brackenfell, Cape Town, South Africa.
Its inroad into Nigeria has popularised the retail supermarket business, employing over 2000 directly and supporting other local businesses especially the farmers through which some of its items are sourced.
However, supply chain challenges, inflationary pressures, among others, have hit the business segment, resulting in huge financial losses.
The company therefore decided to focus on its South African market while transitioning from ownership to franchise business model.
Already it has shut down operations in many African countries including Nigeria, Kenya, Ghana, Uganda, among others.
After 16 years of operation in Nigeria, the largest retail company sold its Nigerian operations to a company owned by a group of local investors.
The company blamed the decision to exit Nigerian operations on unfavourable market conditions.
In 2020, the then Chief Executive Officer, Pieter Engelbrecht said, “We are at the approval stage in terms of the sale of our Nigeria supermarket operation.
“From here, our capital allocated to the region remains at a minimum and we continue to manage costs as best as we can.”
However, four years after the takeover, the Shoprite stores in Nigeria are becoming virtually extinct. As far back as 2024, the company closed down its Kano store.
Residents have already adjusted to life without Shoprite since it left the city following a decision to close operation in the state effective January 14, 2024 as announced in a statement by its management.
The decision, the management said, was due to its financial situation as well as the difficult business climate in the state at the time.
It was also gathered that the store struggled with rent payment to the Ado Bayero Mall which was N66 million monthly translating into N792 million yearly minus electricity bills, cost of powering and maintaining its generator and personnel cost.
Shoprite also faced stiff competition from other super markets located along the same Zoo road where the Ado Bayero Mall housing ShopRite was located.
A Kano based retail outlet Nine (N9ne) and Bedmate Furniture have taken over the space left by Shoprite at the shopping mall.
Secretary National Association of Super markets in Kano Umar Habu Ibrahim told Daily Trust at the time that lots of super markets had closed shops but the case of Shoprite was different, noting that rising transportation cost and foreign exchange crisis were the main triggers.
“The reason Shoprite is closing first is the exchange rate because they import wares from abroad and secondly it is not about patronage but non cordial relationship with Ado Bayero Mall.
“The mall in my view has no strategy and policy where the common man can invest. They give out rent based on square metres. We are not used to that, and you have to pay monthly,” said Ibrahim.
According to him, the underlying challenge is that the management of the mall kept increasing the rent coupled with the exchange rate uncertainty forcing many shop owners including Shoprite to exit.
Deputy senate president Senator Barau Jibrin had tried to persuade Shoprite to reconsider leaving Kano but his intervention yielded no results.
In Lagos, the usually bustling Shoprite outlet inside the Ikeja City Mall in Lagos has taken on an unfamiliar look.
Once renowned for long queues at checkout counters and crowded aisles filled with shoppers, the store now presents a stark contrast, with empty shelves, scanty product displays, and only a handful of customers walking through.
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