Africa’s retail giant, Shoprite Holdings Limited has begun plans to exit the West African market after recording continuous loss in its operations in the region.
This was made known in a trading update filed by the retail company at the Johannesburg Stock Exchange (JSE) on Monday.
According to the update, the decision by the company’s board to discontinue its operation in Nigeria was due to approaches from various potential investors as well as a re-evaluation of the Shoprite’s operating model in Nigeria.
“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,” the update reads.
“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.”
According to Premium Times, while the company’s total sales of merchandise may be on the rise, it is struggling outside South Africa.
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.
The update by the retail store added, “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.”
Shoprite has been in operation in Nigeria for about 15 years since it launched its first retail store in Lagos in December, 2005.