One of Africa’s largest supermarket chains, Shoprite, has begun a formal process to exit Nigeria.
In a trading update published on Monday, the South African-based company said the decision was made after “approaches from various potential investors, and in line with our re-evaluation of the Group’s operating model in Nigeria.”
The company said when it reports its results for the year, its business in Nigeria “may be classified as a discontinued operation.”
The company’s Nigerian business posted a -6.3% decline in sales for the year ending June 2020, according to its Monday update.
The company entered the Nigerian market in 2005 and its exit continues a trend of South African retail business struggling in Africa’s most populated nation.
Mr Price, another South African retailer, announced plans to close its Nigerian business in June.
In 2014, South African retailer, Woolworths, also pulled the plug on its Nigerian operation, citing high rents and duties, as well as marketing difficulties.
In 2012, Shoprite announced plans to spend up to $205 million on securing new locations in Nigeria.
The supermarket chain went on to spread its tentacles across most of Nigeria’s largest cities.
In 2016, the Nigerian economy suffered a recession, severely affecting consumer spending power and foreign exchange reserves.
In 2019, Shoprite stores were attacked in Lagos as part of reprisal actions for xenophobic-induced attacks against Nigerians in South Africa.
Shoprite’s expected closure in Nigeria comes amid the coronavirus pandemic, which has forced economies across the world into a slump and devasted entire industries.