Reasons Shoprite is leaving Nigeria's retail business"

If the company's scorecard for the year ended June 28, 2020 is any indication, weakness in purchasing power, difficulties with foreign exchange, and fierce competition were some of the major factors that informed the decision, even though the news of Shoprite's impending departure from Nigeria may have surprised many.

Also, there had been currency devaluations in the supermarket's non-South African division. Prior to the COVID-19 pandemic, the value of the Nigerian naira was N360. It then declined to N460 in June and is currently at N475 against the US dollar.

Although the business was thought to be doing well in terms of local currency, it was losing money on the abroad, while fluctuating exchange rates continued to jeopardize its financial stability.

The Guardian was already informed by an insider that the primary obstacles were the high cost of doing business in the most populous Black nation and the volatility of foreign exchange. The insider also added that the new agreement will be set up to discourage monopoly and promote the development of other franchisees.

The source stated that while the majority participation in the proposed mart may go to Artee Group, the owners of the SPAR Nigeria license, the deal is still up to as many willing wealthy Nigerians and investors, even though the brand may be kept.

In addition to serving the middle class primarily in a welcoming setting, the superstore's drop in profits and household incomes, as well as the rise of competitors 

Its market share had been eroded by companies like Supersaver, Ebeano, D'Prince, Hubmart, Spar, and others.

Another store from South Africa, Mr. Price, is also embroiled in the exit drama. The retailer has expressed a desire to concentrate on the largest economy in its native nation.

Many fast-moving consumer goods (FMCG) corporations have created business strategies that take use of the effectiveness of the informal marketplaces to promote their items rather than keeping them on the shelf in response to declining returns and rising unemployment.

In December 2005, Shoprite established its first location in Nigeria. Currently, the company operates 26 stores in eight states, including the Federal Capital Territory (FCT).

Additionally, it stated that over 2,000 people—99 percent of whom are purportedly Nigerians—were employed.

The conclusion might have an impact more than 300 suppliers and value chain participants.

After 15 years in the nation, Shoprite Holdings Limited reported that the COVID-19 lockdowns caused a 7.4% decline in customer visits for the year.

It also stated that sales outside of South Africa had only climbed by 0.1% for the year, and auctions had decreased by 1.4%.

The study states that the non-South Africa operation—which does not include Nigeria—contributed a pitiful 11.6% of the group's sales.