Devaluation of naira and lower sales resulting especially from anti-xenophobic attacks on its shops may have forced the decision of Shoprite to exit the Nigerian market.
The South African group with 25 stores across eight states in the federation including the Federal Capital Territory, had on Tuesday announced it plan to exit the Nigerian market by getting suitable local investors.
The company in three of its recent reports hinted at the difficulties it was experiencing in Nigeria, citing low sales and currency devaluation.
Xenophobic attacks on foreigners in South Africa, especially blacks, in September 2019 had resulted in reprisals attacks on Shoprite outlets in Nigeria.
This subsequently resulted in lower sale figures in country as acknowledged by the retail chain group in its latest operational results. The company also decried the impact of the devaluation of the naira on its business in the report.
Shoprite in its ‘Unaudited results for the 26 weeks to 29 December 2019’ stated: “With regards to Nigeria, the impact of store closures and subsequent reduction in customer count, both during and after the September Xenophobic attacks, resulted in a difficult half with sales declining by 8.1 per cent in constant currency terms.
It stated, “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.”
Credit: punchng.com
The post Shoprite to exit Nigeria due to low patronage appeared first on The Chronicle Online.
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