This is not the best of times for the popular retail company, Shoprite, in Nigeria as the firm struggles to stay afloat four years after the exit of its former South African owner from Nigeria’s retail business, Daily Trust can report.

Amidst the growing competition in the retail supermarket segment, Shoprite is fast losing its dominance in the space with most of its outlets virtually empty and on the verge of shutting down.

As of the time of filing this report, Shoprite stores in Ilorin and Ibadan have been shut down while checks by Daily Trust at most of their retail outlets that are still open across the country showed virtually scanty shelves.

Shoprite in Nigeria

Since 2005 when the first Shoprite store opened in Lagos, it has become a household name in the retail supermarket segment, as it expanded to eight states including the federal capital territory with no fewer than 25 stores.

Shoprite is a subsidiary of Shoprite Holdings, which is the parent company of the Shoprite brand, a South African company with headquarters in Brackenfell, Cape Town, South Africa.

Its inroad into Nigeria has popularized the retail supermarket business, employing over 2000 directly and supporting other local businesses especially the farmers through which some of its items are sourced.

However, supply chain challenges, inflationary pressures, among others, have hit the business segment, resulting in huge financial losses.

The company therefore decided to focus on its South African market while transitioning from ownership to franchise business model.

Already it has shut down operations in many African countries including Nigeria, Kenya, Ghana, Uganda, among others.

After 16 years of operation in Nigeria, the largest retail company sold its Nigerian operations to a company owned by a group of local investors.

The company blamed the decision to exit Nigerian operations on unfavourable market conditions.

In 2020, the then Chief Executive Officer, Pieter Engelbrecht said, “We are at the approval stage in terms of the sale of our Nigeria supermarket operation.

“From here, our capital allocated to the region remains at a minimum and we continue to manage costs as best as we can.”

However, four years after the takeover, the Shoprite stores in Nigeria are becoming virtually extinct. As far back as 2024, the company has closed down its Kano store.

Residents have already adjusted to life without Shoprite since it left the city following a decision to close operation in the state effective January 14, 2024 as announced in a statement by its management.

The decision, the management said, was due to its financial situation as well as the difficult business climate in the state at the time.

It was also gathered that the store struggled with rent payment to the Ado Bayero Mall which was N66 million monthly translating into N792 million yearly minus electricity bills, cost of powering and maintaining its generator and personnel cost.

Shoprite also faced stiff competition from other super markets located along the same Zoo road where the Ado Bayero Mall housing ShopRite was located.

A Kano based retail outlet Nine (N9ne) and Bedmate Furniture have taken over the space left by Shoprite at the shopping mall.

Secretary National Association of Super markets in Kano Umar Habu Ibrahim told Daily Trust at the time that lots of super markets had closed shops but the case of Shoprite was different, noting that rising transportation cost and foreign exchange crisis were the main triggers.

“The reason Shoprite is closing first is the exchange rate because they import wares from abroad and secondly it is not about patronage but non cordial relationship with Ado Bayero Mall.

“The mall in my view has no strategy and policy where the common man can invest. They give out rent based on square metres. We are not used to that, and you have to pay monthly,” said Ibrahim.

According to him, the underlying challenge is that the management of the mall kept increasing the rent coupled with the exchange rate uncertainty forcing many shop owners including Shoprite to exit.

Deputy senate president Senator Barau Jibrin had tried to persuade Shoprite to reconsider leaving Kano but his intervention yielded no results.

In Lagos, the usually bustling Shoprite outlet inside the Ikeja City Mall in Lagos has taken on an unfamiliar look.

Once renowned for long queues at checkout counters and crowded aisles filled with shoppers, the store now presents a stark contrast, with empty shelves, scanty product displays, and only a handful of customers walking through.

A recent visit revealed near-empty sections across groceries, frozen foods, and the winery. While the frozen aisle displayed just a few packets of protein, the wine racks were largely bare, and many rows of shelves stood hollow. The atmosphere, subdued compared to Shoprite’s trademark energy, has fuelled speculation about the retailer’s future in Nigeria.

Shoppers and industry watchers have whispered about the possibility of Shoprite exiting Nigeria, a rumour reinforced by the store’s current state.

However, officials and staff at the Ikeja branch insist the retail giant is not folding up operations.

In a chat with the store’s administrator, identified as Oluwatosin, he explained that the development is linked to ongoing discussions between Shoprite’s new management and its suppliers.

“Actually, there is a new management, so they are trying to have a kind of meeting with all the stakeholders, the suppliers and vendors so that they can renegotiate their prices,” she said, adding, “Hopefully when that is completed, then they will start stocking the store again.”

She dismissed fears of expired products being circulated during the supply pause, stressing that ShopRite maintains “zero tolerance” for expired goods. “We would rather not sell at all than leave expired products on the shelves,” she added.

Oluwatosin, however, could not provide a definite timeline for when normal operations would resume.

“I wouldn’t be able to tell you precisely because I don’t know how they are having their meeting. I’m just an employee. It is when they have sorted everything and they tell us the situation of things that we know what is happening,” she said.

Beyond management’s position, staff reactions painted a mixed picture. One staff member, visibly surprised when asked about possible closure, dismissed the rumour outright.

“That is a big lie. We are not leaving anywhere. It’s not possible,” she said, adding that the company has even launched television jingles to reassure customers.

Another staff member, though initially hesitant to speak, admitted to growing frustration within the workforce. According to him, the supply challenges have dragged on for months, leaving many employees disillusioned.

“This has been going on for about three to four months now. They keep telling us that everything is going to be alright this month,” he said. “They are just doing small, small orders of supplies for a while now and they say things will be sorted this month.”

Shoprite, which entered the Nigerian market in 2005, quickly became the country’s leading retail supermarket chain, drawing huge crowds with its wide product range and relatively affordable prices.

But in recent years, it has faced increased competition from emerging shopping malls, local supermarkets, and online platforms that are expanding aggressively across major cities.

For now, however, the situation at Ikeja paints a picture of uncertainty. While management insists the retailer is not exiting Nigeria and promises a rebound, many customers walking through its half-empty aisles are left wondering how soon the once vibrant store can return to its former dominance.

Many shelves scanty in Abuja

A visit at the Shoprite store located at Jabi Lake Mall in Abuja revealed that many shelves which have always been stocked with items were empty.

At first, when our reporter got there, the store was closed. Upon enquiry, the attendants explained that it was due to power outage.

After about 30 minutes, power was restored and customers were allowed in, but were surprised to see many shelves empty.

One of the staff who spoke to Daily Trust on condition of anonymity stated the situation has been like this for the last two months.

…Staff face uncertainty amidst empty shelves

“This is what has been happening in the last two months. We have been ordering and there is no supply and we don’t know what is happening. All of us staff here are worried, we don’t know what’s happening and we don’t know what they are planning,” he said

Asked if there is any communication from management, he said, “The management is not saying anything so we are just here. Everybody here, our chest is beating because we can’t afford to lose our jobs if they close,” he said

Another staff member who also spoke to Daily Trust on the condition of anonymity said the staff are just wondering the direction of the outlet as there has been no supply in the last two months.

Asked if the staff are being paid, he said, “We are paid regularly because the management knows if they don’t pay, staff will pack the items in the store and go with them so they are paying but they are not just saying anything on the recent non supply of products.”

Furthermore, Daily Trust sought to hear from one of the management staff who also spoke on condition of anonymity.

According to her, “the company just finished auditing its annual financial results and wanted to certify the state of things first before continuing with supply.

So by God’s grace at the end of September we will restock,” she said.

She also allayed fears of Shoprite folding up adding, “Shoprite is not a one man supermarket and it can’t just close like that, it’s just our Financials that was delaying so now we are done and we will restock by September,” she added.

Shoprite shut in Ilorin, Ibadan

The Shoprite stores have been shut down in Ilorin, Kwara State and Ibadan, the Oyo State Capital.

In Kwara, prior to the shutdown when Daily Trust visited in Ilorin, the once-busy retail hub looked like a shadow of its former self.

Once a beehive of activities and one of the city’s go-to shopping centres grossing millions in minutes, it now bore the look of near-abandonment.

Several shelves were empty, and in the 20 minutes our correspondent spent inside the facility, no sale was recorded.

Apart from scattered empty containers, bottled water packs were used to fill many shelves, while the bakery section showed only faint signs of activity. The usually vibrant atmosphere had given way to silence, with a handful of staff moving idly or engaging in quiet discussions.

Some of the aisles were stocked with similar items spread thinly across to cover the empty spaces. Staff members approached by our correspondent declined to comment on the situation.

However, one employee who spoke on condition of anonymity, citing fear of dismissal, attributed the decline to a recent change of ownership.

“It is just the change in ownership. We are still coming up by the special grace of God and we are not leaving Ilorin. The scantiness of the place and dwindling patronage is expected during such a period.

“Formerly, it was owned by some people from South Africa, but it was sold about three years ago. The buyers wanted to resell, and it was the takeover by the new investors that created the situation we are seeing. We hope activities will soon pick up as before,” the source said.

In Ibadan our correspondent visited the store along Ring Road Ibadan, the expansive store was under lock and key. Also, the branch at Mokola has equally been shut.

Though it was shut down about six days ago, many shoppers were still seen at the mall when our correspondent checked.

We are working to revive Shoprite – Management

At the entrance, there was a notice indicating the store was temporarily shut.

The notice read: “Dear esteemed customers, the store is temporarily closed today due to some circumstances beyond immediate control. The able management is working round the clock to ensure that operations pick up very soon. Kindly bear with us. Thank you for your understanding. By the Management.”

There has been no official comment from the new owner. A media consultant to the company who was contacted since Sunday is yet to get back to our correspondent despite several reminders.

When further reminded yesterday, he said, “Sorry I have not been able to correspond at all.”

Companies that have exited Nigeria

The impending exit of Shoprite is coming amidst the shutdown of some businesses in Nigeria in the last two years.

For instance, GlaxoSmithKline, also known as GSK Plc, a multinational pharmaceutical and biotechnology company, with headquarters in the United Kingdom announced in August 2023 that it would cease operations in Nigeria after 51 years of operation

The company’s announcement came three months after President Tinubu assumed office. It has since left the country in August 2023 but its products are still in the Nigerian market using third-party distributors.

In the same vein, Procter & Gamble, also known as P&G, shut down its operations in Nigeria in December 2023.

The exit of Procter & Gamble (P&G), a multinational consumer goods company in Nigeria, was estimated to have incurred losses of over 5,000 jobs and a major decline in foreign investments into Nigeria.

P&G is a leading multinational consumer goods company headquartered in the US.

Also, Bolt Food, the food delivery arm of the ride-hailing company Bolt, ceased operations in Nigeria on December 7, 2023 which led to thousands of job losses in major cities across the country.

Similarly In November, Sanofi-Aventis, a French pharmaceutical company, announced that it would use a third-party model to distribute its products in Nigeria.

It further stated that from February 2024, it will put a stop to its direct operations in the country, opting to hand over this business to a third party.

In a statement signed by the Country Lead for Sanofi, Ms Folake Odediran, it was noted that this new business model was adopted for the “commercialization of Sanofi portfolio of medicines” through a major distributor.

In the same vein, Norwegian energy company, Equinor, concluded its 31-year presence in Nigeria’s oil and gas sector after finalizing the sale of its assets to streamline its international portfolio.

The company announced that the $1.2 billion deal, including $710 million in upfront payments and contingent considerations, was completed on Dec. 6, 2024, after which it exited the country

An economist, Dr. Marcel Okeke in a chat with our correspondent said more companies might exit Nigeria due to what he called, “unconducive” business climate.

He said Shoprite originally exited and sold the franchise due to the fact that the economy is no longer competitive.

He said, “Of course many companies have left and many are still going to leave you understand because the environment is not conducive, Nigeria’s economy as it is uncompetitive when you compare it to other economies, those economies are more business friendly.” (Daily Trust)

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