South Africa owned retail behemoth, Shoprite Holdings Limited has announced it is pulling out of Nigeria, 15 years after it came into the country in 2005, following a string of losses
The firm made the announcement on Monday in its operational and voluntary trading update for the year ended on June 28, 2020 posted on the Johannesburg Stock Exchange.
Shoprite 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 lockdown announced in several African countries due to the coronavirus pandemic.
“Second half constant currency sales growth of 6.3% was significantly impacted by lockdown regulations across the 14 African countries in which we trade. Lockdown 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.