BusinessNews

Shoprite announces plan to pull out of Nigeria

* Considers sale of all or a majority stake in Retail Supermarkets Nigeria Limited, its Nigerian subsidiary

Shoprite, the South African giant, which began its Nigerian operation in 2005, has announced plans to discontinue its operation in Nigeria.

According to an online news platform (not AbeyaNews), the company made the announcement today in its operational and voluntary trading update for the year ended on June 28, 2020.

The multi-national 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 lock-down announced in several African countries due to the Coronavirus pandemic.

“Second half constant currency sales growth of 6.3% was significantly impacted by lock-down regulations across the 14 African countries in which we trade. Lock-down 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,” the report further stated.

With 26 stores across eight states in the country including Federal Capital Territory, Abuja, in 15 years of its operation in Nigeria, Shoprite reports that it has employed more than 2,000 people in the country, 99 per cent of them Nigerians.

The company also claimed to have built more relationships with over 300 Nigerian suppliers, small businesses and farmers.

Show More

Related Articles

Leave a Reply

Your email address will not be published.

Back to top button
Close
Close