Shoprite, Africa’s largest food retailer, is planning to
exit the Nigerian market after posting continuous decline in sales from its
operations.
In a trading update filed at the Johannesburg Stock Exchange
(JSE) on Monday morning, the retail giant said it was planning to discontinue
its operations 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 read.
“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.”
In Nigeria, sales declined by 6.3 percent in the 2020 fiscal
year.
Shoprite launched in Nigeria nearly 15 years ago, opening
its first store in Lagos in December 2005.
That chain has grown from one to more than 25 retail stores
across Nigeria — including some of the biggest retail stores in west Africa.
Outside South South Africa, Shoprite sales grew by only 0.1
percent in the second half of the year under review.
“In equally, if not more difficult circumstances resulting
from COVID-19 lockdown regulations, Supermarkets Non-RSA’s second-half reported
an increase in sales of 0.1%,” the company said.
This resulted “in an overall decline in sales of 1.4% for
the year but in constant currency increased by 6.6%.”
In the trading update, the company suffered
from the devaluation of the naira against the US dollar.
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