South African retail giant Shoprite in Nigeria is currently going through downtimes as the firm struggles to stay afloat four years after the exit of its former South African owner from Nigeria’s retail business.
Shoprite is rapidly losing market share in the retail grocery sector due to increased competition; the majority of its stores are essentially closed and about to close.
As at press time, Shoprite stores in Ilorin and Ibadan were closed, however, inspections of the majority of their retail locations that remained open nationwide revealed essentially empty shelves.
Shoprite has become a household name in the retail supermarket sector since its first location opened in Lagos in 2005. It now has at least 25 locations across eight states, including the federal capital territory.
Shoprite Holdings, the parent company of the retail brand, is a South African business with its headquarters located in Brackenfell, Cape Town. Shoprite is a subsidiary of this corporation.
Its entry into Nigeria has made the retail supermarket industry more well-known, directly employing over 2000 people and assisting other local companies, particularly the farmers who provide some of its products.
The business segment has suffered significant financial losses as a result of supply chain issues, inflationary pressures, and other factors.
As a result, the company chose to concentrate on the South African market while switching from an ownership to a franchise business model.
Nigeria, Kenya, Ghana, and Uganda are just a few of the African nations where it has already ceased operations.
In 2020, the then Chief Executive Officer, Pieter Engelbrecht said, “We are at the approval stage in terms of the sale of our Nigeria supermarket operation.
“From here, our capital allocated to the region remains at a minimum and we continue to manage costs as best as we can.”
However, four years after the takeover, the Shoprite stores in Nigeria are becoming virtually extinct. As far back as 2024, the company closed down its Kano store.
Residents have already adapted to life without Shoprite after the company left the city after its management declared in a statement that it would cease operations in the state on January 14, 2024.
According to the management, the decision was made because of the company’s financial status and the challenging business environment in the state at the time.
Additionally, it was discovered that the business had trouble paying the N66 million monthly rent to the Ado Bayero Mall, which translates to N792 million year after deducting electricity costs, the cost of running and maintaining its generator, and staff expenses.
Authorities and employees at the Ikeja location, however, maintain that the retail behemoth is not ceasing operations.
During a conversation with Oluwatosin, the store’s administrator, he clarified that the situation is connected to ongoing talks between Shoprite’s suppliers and its new management.
Oluwatosin, the store’s administrator, clarified in a chat that the development is connected to ongoing talks between Shoprite’s suppliers and its new management.
But in recent years, it has faced increased competition from emerging shopping malls, local supermarkets, and online platforms that are expanding aggressively across major cities.
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