One of Africa’s leading supermarkets, Shoprite Holdings, will leave the Nigerian market after 15 years, the latest in a series of withdrawals by South African retailers from the West African nation.
The retailer’s share price increased by 11 percent on Monday after it reported higher total sales and said it was looking into the sale of all of, or a majority stake in, its Nigerian subsidiary.
The retailer said it arrived at the decision to sell following a review of its operating model and approaches from a range of potential investors.
According to Shoprite, its Nigerian operations could be classed as discontinued when it reports its full-year results, as expected on September 8.
“Any further updates will be provided to the market at the appropriate time.”
Even with the disruptions of the COVID-19 pandemic and an impairment charge, the retailer said its full-year headline earnings per share (HEPS) may increase as its total sales rose by 6.4 percent to 156.9 billion rand in the 52 weeks to June 28.
Shoprite said that its South African supermarkets, on the back of strong second-half performances, grew by 8.7 percent while sales in supermarkets outside South Africa (excluding Nigeria) dropped by 1.4 percent.
South African retailers have had mixed fortunes in the Nigerian market. Shoprite was affected by last year’s xenophobic attacks in South Africa which saw its Nigerian stores looted and vandalized.
In June this year, Mr. Price Group closed shop in Nigeria due to weak economic growth, challenges in repatriating funds and local procurement.
In November 2013, Woolworths said it was pulling out of Nigeria citing high rental costs, duties and supply chain challenges in the West African country.
