THE Board of Africa’s biggest retailer, Shoprite Holdings Limited, on Monday, announced plans to discontinue its operations in Nigeria after 15 years.
The company disclosed this move in its operational and voluntary trading update.
The Board said the company had to take the decision following the re-evaluation of the Group’s operating model in Nigeria and “approaches from various potential investors.”
Despite challenges posed by the negative effects of the COVID-19 pandemic on businesses, Shoprite had announced an increase of 6.4 per cent (R156.9billion) in total sales of merchandise for the outgoing year.
Announcing its exit plans, the company said, “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.”
According to the report, the company’s non-South Africa supermarket operation, excluding Nigeria, contributed a paltry 11.6 per cent to group sales, while non-South Africa sales also dropped by 1.4 per cent in the review year.
The company attributed the drop to the lockdown announced in several African countries to contain the spread of COVID-19.
It said, “Second half constant currency sales growth of 6.3 per cent 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, which has a total of 26 stores across Nigeria, including the Federal Capital Territory, came into the country in December 2005.
The company’s data also reveal that 99 per cent of its 2,000 employees are Nigerians.
