Giant South African retailer, Shoprite, is planning to exit the Nigerian market. The retailer which employs around 2000 Nigerians, and operates in eight cities in the country, cited the poor state of the economy and the dwindling value of the Naira as reasons for the planned pull out.
Meanwhile one analyst believes the challenge facing Shoprite in the country predated the lockdown, considering giant retailers such as Mr. Price and Woolworths have had it tough navigating Nigeria’s tough economic terrain, leading to their exit, in recent past.
Dissecting the realities in Africa’s most populous nation vis-à-vis the giant retailer, Nduka Orjinmo, an analyst on BBC, wrote, “Shoprite’s failure in Nigeria is not surprising, the shiny shopping malls with escalators where its outlets are located are more popular for taking pictures than actual shopping”.
“Tens of millions of Nigerians are poor or unemployed – and minorities who have the spending power to shop at Shoprite have seen their finances take a battering because of the corona virus pandemic. These are hard-times for businesses, but the slow growth at Shoprite Nigeria predates the pandemic”, he added.
Nigeria is said to be the on the brink of its worst recession so far, according to the World Bank. The projected recession is due largely to the collapse in oil prices as mobility grounded to a halt during the COVID-19 induced global lockdown. The fallout of the collapse in oil prices have led to a depleting national reserve, continuous devaluation of the country’s currency, unbridled national borrowing, and declining consumer purchasing power.