Africa’s biggest grocery retailer, Shoprite, was rumored to join the ensemble of multinational companies exiting Africa’s most populated country, Nigeria. However, it has been revealed that the information is not fully accurate according to information obtained from the company Heads. They explained that currency devaluation of the Naira, combined with downward pressure on the Rand versus USD have eroded profit. Although their sales revenue in Naira is positive, once converted to Rands it ends up at a net operating loss.
Due to these challenges, ShopRite strategy entails onboarding a local investor to help support and enhance performance. The process is still ongoing as the local investor has not yet been decided from several options under consideration.
Another reason behind the decline is the coronavirus lockdown especially the lockdown regulations. For example, 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 opened its first store in Nigeria in December 2005. Currently, it has grown to 26 stores across eight states in the country including FCT Abuja. Also, the company reportedly employs more than 2,000 people in Nigeria, of which 99 percent are Nigerians.