South Africa owned grocery retail giant, Shoprite, has announced that it is exiting Nigeria after 15 years of operations and months of decline in sales.
In a statement released on Monday, August 3, the supermarket chain which is based in Cape Town is Africa’s largest retailer and has started a formal process to consider the potential sale of all or a majority stake in its supermarkets in Nigeria.
Shoprite’s operations in Nigeria saw a 6.7% decline in sales for the twelve months to June 2020, according to the group’s trading statement.
South African retailers have continued to struggle in the Nigerian market and just recently Mr Price also exited the market after Woolworths did the same six years ago.
A statement from ShopRite 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.”
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%.