After 15 years of operations, acclaimed South African retail giant, Shoprite, has announced that it is closing its branches in Lagos and every other part of the country.
In a statement released today, it said that it has began the formal proceedings to discontinue its operations in Nigeria.
The multi-national retail group, which announced a 6.4 per cent increase (N3.48 trillion), in total sales of merchandise for the outgoing fiscal year, despite the COVID-19 pandemic lockdowns, announced that it was influenced by “approaches from various potential investors, and in line with our re-evaluation of the group’s operating model in Nigeria.”
The document read: “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. As such, Retail Supermarkets Nigeria Limited may be classified as a discontinued operation when Shoprite reports its results for the year. Any further updates will be provided to the market at the appropriate time.
” While the company’s total sales of merchandise may be on the rise, it is struggling outside South Africa. According to the report, the non-South Africa supermarket operation of the company, excluding Nigeria, contributed a paltry 11.6 per cent to the group sales. Its non-South Africa sales also declined by 1.4 per cent in the year under review. The company blamed this decline on the lockdown announced in several African countries due to the coronavirus pandemic.
“Second half constant currency sales growth of 6.3% was significantly impacted by lockdown regulations across the 14 African countries in which we trade. 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.”
‘Ripple Effect On Nigerian Economy’
The retail giant has revealed that most of its over 2,000 staff are Nigerians.
This indicates imminent major personnel lay-offs.
It also indicated that its several hundreds of distribution partnerships with Nigerian entrepreneurs would likely be terminated.
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