One of the largest supermarket chains in Africa Shoprite has initiated the process of exiting Nigeria.
In a business update posted today, 3rd August, the company said that the decision to exit was reached after “approaches from various potential investors and in line with our re-evaluation of the group’s operating model in Nigeria.”
The South African supermarket chain said it fears that by the time it reports its results for the year, its Nigeria’s arm of the business may flag as insolvent or “may be classified as a discontinued operation.”
In its Monday review, the company posted a dismal -6.3% decline in sales for the year ending June 2020.
A number of other South African businesses in Nigeria have been struggling for the last couple of years.
Sadly, in 2012, Shoprite announced that it would be spending about $205 million expanding its business and and opening new locations in Nigeria. It soon began opening new shops in most of Nigeria’s major cities.
When Nigeria’s economy went into a recession in 2016, consumer spending and foreign exchange reserves were adversely impacted.
Shoprite suffered yet another setback in 2019 following reprisal attacks as a result of xenophobic violence against Nigerians in South Africa.
Expected final exit from Nigeria this year, 2020 is caused by the down-turn in world economy brought on by the #COVID19 pandemic.
Other South African owned companies like Mr Price announced its exit plans in June this year.
Woolworths left Nigeria in 2014 citing high rents and duties as well harsh marketing conditions.
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Shoprite Exiting Nigeria