Africa’s biggest supermarket, South African-owned Shoprite, is considering pulling out their market from Nigeria.
It said it was looking at selling all “or a majority stake” of its operations in Africa’s most-populous country.
Shoprite is the latest South African retailer to look at leaving Nigeria – clothing firm Mr Price announced its exit in June, and Woolworths in 2014.
Shoprite’s decision comes at a time when Nigeria’s economy is struggling amid the coronavirus pandemic.
Shoprite said lockdown restrictions because of coronavirus had affected its operations in 14 African countries, with sales declining by 1.4% in those markets. Its South African operations on the other hand witnessed a significant growthu.
The retailer has also been battling currency-induced inflation surges – especially in Nigeria, where it has been hit the hardest.
Shoprite employs approximately 2,000 people in Nigeria.
The retailer’s stores in the capital, Abuja, and the commercial hub, Lagos, became a flashpoint for outrage in 2019, following violent attacks in South Africa on other migrants from elsewhere in the continent.
The National Association of Nigerian Students (Nans) – which represents university students at campuses across the country – picketed branches of Shoprite and South African telecoms giant MTN, turning away staff and customers.
The student body demanded that all South African-owned businesses leave the West African state.
Shoprite’s failure in Nigeria is not surprising, the shiny shopping malls with escalators where its outlets are located are more popular for taking pictures than actual shopping.
Though it is regarded as a working-class supermarket in South Africa, most here consider it as catering to the upper classes.
Tens of millions of Nigerians are poor or unemployed – and the minority who have the spending power to shop at Shoprite have seen their finances take a battering because of the coronavirus pandemic.
These are hard times for businesses, but the slow growth at Shoprite Nigeria predates the pandemic.
Consumers here want quality services, but they want it on the cheap.