The Board of Africa’s biggest retailer, Shoprite, has announced plans to discontinue operations in Nigeria after 15 years in. The retail giant initiated a formal process to consider the potential sale of all or a majority stake in its supermarkets in Nigeria.
This was disclosed in a trading statement for the 52 weeks to 28 June 2020 released on Monday.
In the statement, Shoprite said the results for the year do not reflect any of their operations in Nigeria as it will be classified as a discontinued operation.
The statement by the retail giants 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. Any further updates will be provided to the market at the appropriate time.”
In the statement Shoprite revealed that 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%.
See Photos of the statement below;
Recently, Mr Price exited the market after after the company reported they were running at a loss operating in Nigeria. Although 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.