By Gbenga Abulude
South African owned superstore, ShopRite has announced its plan to leave the Nigerian market 15 years after it operating in the country.
The decision, it said, was informed by the COVID-19 pandemic which has affected businesses worldwide.
In its “Operational and Voluntary Trading Update (52 Weeks Ended 28 June 2020)” released on Monday, the superstores with presence in a good number of cities in Nigeria said the retail supermarkets arm will be disposed.
The update 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 April the supermarket announced it lost 8.1% of its sales in constant currency terms at the end of the second half (H2) of 2019 due to the September xenophobic attacks.
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.
In September, Shoprite stores in Nigeria were vandalised and looted following an alleged xenophobic attack in South Africa, targeting Nigerians. Owing to fears of further attacks several Shoprite stores across Lagos were sealed and guarded by police.
In the report released in April, the parent company stated that the impact of the store closures and drop in customer count resulted in a difficult half for the company.
ShopRite said the subsequent reduction in customer count during and after the crisis implies that some customers of the supermarkets in Nigeria boycotted the brand.
ShopRite is not the only South African country leaving Nigeria. In June, Mr. Price Group also stated plans to close its Nigerian business to focus on its home market business in South Africa.