South Africa’s grocery ShopRite is leaving Africa’s biggest market, Nigeria, 15 years after it opened shop in the West African country.
The announcement by ShopRite came months after another South African brand, Mr Price, exited the market.
The company said it has been approached by potential investors willing to take over its Nigerian operations. It said it considering an outright sale of its operation or selling a majority stake in its Nigerian subsidiary.
“As such, Retail Supermarkets Nigeria Limited may be classified as a discontinued operation,” ShopRite said in a statement on Monday.
The Cape Town-based retailer has started a formal process to consider the potential sale of all or a majority stake in its supermarkets in Nigeria, it said in a trading statement for the 52 weeks to end June released on Monday.
Reports gathered noted that Shoprite is considering selling its Nigerian operations. This process was initiated after the grocer said in November that it was reviewing its supermarket operations outside South Africa and would consider exiting certain countries if that would help reverse regional sales declines. The retailer has been battling currency-induced inflation surges in several other African countries.
International supermarkets (excluding Nigeria) contributed 11.6% to group sales, and reported 1.4% decline in sales from 2018. South African operations contributed 78% of overall sales and saw 8.7% rise for the year.
As a result of the COVID-19 lockdown, customer visits declined 7.4% but the average basket spend increased by 18.4%.
South African retailers have struggled in the Nigeria market. In June, Mr. Price Group made plans to close its Nigerian business to focus on its home market business in South Africa.