Why Shoprite Plans to Pull Out Of Nigeria
The Board of Shoprite Holdings Limited, a South African company with hundreds of outlets in Nigeria, 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.
The company stated this in its “Operational and Voluntary Trading Update” released on Monday.
According to Shoprite, the decision was due to the effect of the COVID-19 outbreak and slow sales.
“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 discontinued operation when Shoprite reports its results for the year. Any further updates will be provided to the market at the appropriate time,” the company explained.
According to news sources, the international supermarkets (excluding Nigeria) contributed 11.6 per cent to the group’s sales and reported 1.4 per cent decline in sales from 2018. South African operations contributed 78 per cent of overall sales and saw 8.7 per cent rise for the year.
It stated that despite difficult circumstances occasioned by the Covid-19 lockdown and accompanying regulations governing trade, transport and operations, the group increased total sale of merchandise for the 52-week to June 28, 2020 (including the impact of hyperinflation in the prior year), by 6.4 per cent to approximately R156.9 billion.