By Akinwale Kasali
Nigeria is set to lose Africa’s biggest grocery retailer, Shoprite, as the Company announces its exit from Nigeria, after 15 years.
The South African Company, in a statement released on Monday said it had commenced a formal process to “consider the potential sale of all, or a majority, stake in its supermarkets in Nigeria.”
“The results for the year do not reflect any of our operations in Nigeria as it will be classified as discontinued operation.
“Any further updates will be provided to the market at the appropriate time,” the statement read in part.
Shoprite exiting the continent’s most populated country, will be a big economic lopsidedness for the nation at a time the nation is yet to recover as a result of the effect of the deadly Pandemic outbreak.
The retail giant initiated a formal process to consider the potential sale of all or a majority stake in its supermarkets in Nigeria.
This was disclosed in a trending statement for the 52 weeks to 28 June 2020 released Monday, August 3rd, 2020.
In a statement, the Company said, “Following approaches from various potential investors, and in line with our re-evaluation of the Group’s operating model in Nigeria, 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.”
Given the aforementioned comment regarding the pending classification of Nigeria as a discontinued operation, Supermarkets Non-RSA (excluding Nigeria) contributing 11.6% to Group sales, recorded a decline in sales of 1.4% for the year from 2018.
However, South African operations contributed 78% of overall sales and saw a 8.7% rise for the year.
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.
This operational update is inclusive of voluntary earnings per share (EPS) and headline earnings per share (HEPS) guidance, is more comprehensive than usual for the purpose of providing shareholders and investors with an understanding of how the Group has traded during the COVID-19 pandemic.
Despite difficult circumstances, in a year incorporating the COVID-19 lockdown and accompanying regulations governing trade, transport and operations, the Group increased total sale of merchandise for the 52 weeks to 28 June 2020 (including the impact of hyperinflation in the prior year) by 6.4% to approximately R156.9 billion. Like-for-like growth for the year was 4.4%.
Shoprite becomes the third South African retailer to leave the Nigerian market after Mr Price and Woolworth.
