What Nigerians Are Saying About Shoprite Discontinuing Operations

15 years after it opened its first store in Lagos in December 2005, Shoprite Holdings Limited, said in a trading statement for the 52 weeks to end June released on Monday, that it has started a formal process to consider the potential sale of all or a majority stake in its supermarkets in Nigeria.

This process was initiated after the Shoprite said in November that it was reviewing its supermarket operations outside South Africa and would consider exiting certain countries if that would help reverse regional sales declines. The retailer has been battling currency-induced inflation surges in several other African countries, Bloomberg reports.

The update partly read:

Despite difficult circumstances, in a year incorporating the COVID-19 lockdown and accompanying regulations governing trade, transport and operations, the Group increased total sale of merchandise for the 52 weeks to 28 June 2020 (including the impact of hyperinflation in the prior year) by 6.4% to approximately R156.9 billion. Like-for-like growth for the year was 4.4%.

International supermarkets (excluding Nigeria) contributed 11.6% to group sales and reported a 1.4% decline in sales from 2018. South African operations contributed 78% of overall sales and saw an 8.7% rise for the year. As a result of lockdown, customer visits declined 7.4% but the average basket spends increased by 18.4%.

Read the statement below:

This news has not been well-received by some Nigerians, while some argue that it is good for small business growth at large.

Below are some reactions:

It is also an indicator to how poorer Nigerians have become, as grocery retail is a direct beneficiary of a prosperous citizenry. A continuing exit of large retailers simply mean one thing – disposable income is reducing. Govt needs to fix poverty level and stop virtue signaling.

— Ayò Bánkólé (@AyoBankole) August 3, 2020

But again, as I said in my first tweet, one man’s misfortune may be another’s opportunity. This is an opportunity for even more SMEs to plug in and fill the vacuum, especially in serving the bottom of the pyramid mass market.

— Ayò Bánkólé (@AyoBankole) August 3, 2020

Having advised on cross border African M&A deals, there's very little emphasis at a senior exec level to really understand local cultures, consumer preferences & ways of doing business.

It's never as simple as just setting up shop & expecting profits to roll in.

— Koshiek Karan (@iamkoshiek) August 3, 2020

Shoprite's mall-only strategy in Nigeria is faulted, and with growing competition from SuperSaver, Ebeano, D'prince, Hubmart and the rest, their market share will definitely decrease. When last did you buy anything from Shoprite?

— Wale Adetona (@iSlimfit) August 3, 2020

ShopRite leaving is proof you need that Buhari is an economic failure

Nigerians are poorer, FDI is leaving and foreign companies are closing

You don't fight poverty by closing your borders for trade

You will just create a man made inflation & worsen poverty

— William (@_SirWilliam_) August 3, 2020

This Is why I can't take people talking about 2023 serious.

Nigerians cannot wait for the next 3 years to fix up, it's far.

The insecurity up North cannot wait for 3 years, it's far.

You cannot hibernate your way to prosperity, if the economy gets worse

Violence will increase

— William (@_SirWilliam_) August 3, 2020

Here is Nigeria in the past 2 Months:

– ShopRite leaving Nigeria.
– Nipost wants to handle deliveries.
– Government demanding N25,000 per head for secondary schools before opening.

Do you still pledge to Nigeria?

— Somto. ?️? (@SomtoSocial) August 3, 2020

Cost of doing business is so high in Nigeria. You provide your own power, your own water etc…

Costs just keeps getting higher and higher.

The unfortunate thing about this Shoprite debacle is the huge loss to staff, contractors and supplier.

An unfortunate domino effect.

— the Morris Monye factor (@Morris_Monye) August 3, 2020

The exit of Shoprite from Nigeria should tell you what you need to know about the "size of the Nigerian consumer market" and the economic incompetence of the present administration.

Anyway, Leventis & Kingsway Stores suffered the same fate under a previous Buhari Administration.

— Onye Nkuzi (@cchukudebelu) August 3, 2020

All I have to say about the Shoprite thing (read: all I’ll say online) is that large companies hire more people than SMEs and you can’t be serious about economic development and raising employment if you gleeful when big players like this exit.

— S. (@saratu) August 3, 2020

I worry about the level of conversation on here sometimes. These things are elementary. And obvious.

— S. (@saratu) August 3, 2020