The Board of Africa’s biggest retailer, Shoprite Holdings Limited, has announced plans to discontinue operations in Nigeria after 1...
The Board of Africa’s biggest retailer, Shoprite Holdings
Limited, has announced plans to discontinue operations in Nigeria after 15
years. This was disclosed in the company’s operational and voluntary trading
update that was published Monday morning.
The largest retail group, which announced a 6.4 per cent
increase (R156.9billion) in total sales of merchandise for the outgoing year
despite the challenges posed by the COVID-19 pandemic, announced that it took
the decision to discontinue its Nigeria operation “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 report stated.
While the company’s total sales of merchandise may be on the
rise, it is struggling outside South Africa. According to the report, the
non-South Africa supermarket operation of the company, excluding Nigeria,
contributed a paltry 11.6 per cent to the group sales. Its non-South Africa
sales also declined by 1.4 per cent in the year under review. The company
blamed this decline on the lockdown announced in several African countries due
to the coronavirus pandemic.
“Second half constant currency sales growth of 6.3% was
significantly impacted by lockdown regulations across the 14 African countries
in which we trade. Lockdown restrictions pertaining to store closures; social
distancing; transport restrictions; the movement of people; trading hours;
workforce limitations and trade in alcohol impacted various regions to
differing degrees at different times.”
Shoprite came into Nigeria in December 2005 and now has a
total of 26 stores across eight states in the country including Federal Capital
Territory, Abuja. The company also claim to have employed more than 2,000
people in Nigeria, of which 99 per cent of them are Nigerians.
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