Shoprite Begins Exit Process Out Of Nigeria

Shoprite Group, Africa’s largest grocer, has announced that it is considering selling its Nigerian operations after 15 years.

THE WHISTLER had reported the company was considering leaving countries outside South Africa where the performance of its supermarket operations is unimpressive.

The company had experienced downturn in revenue since the incidence of Xenophobic attacks in some parts of South Africa.

ShopRite’s Chief Executive Officer Pieter Engelbrecht had told shareholders at an annual meeting in November that “If we have to close a country we will, we will make the decision no matter how hard it is. We are not scared to take the hard decisions.”

The South African based firm said in a statement on Monday that it has started a formal process to consider the potential sale of all or a majority stake in its supermarkets in Africa’s largest economy.

The statement was part of its  financial report for six months ending  June 2020.

Africa’s largest retailer has been battling currency-induced inflation surges in several other African countries including Nigeria where the currency has devalued by over N105 against dollar at parallel market since November last year.
 

The naira had depreciated between November to June  from N360 per dollar  to N465 per dollar respectively.

Shoprite said the financial statement released for the first half of 2020 ending June does not reflect any of their operations in Nigeria.

According to the company, operations in Nigeria will be classified as discontinued operations.

Shoprite revenue outside South Africa excluding Nigeria amounted to 11.6 per cent of Group sales. The company also reported  1.4 per cent decline in sales from 2018.

According to the statement, South African operations contributed 78 per cent of overall revenue, representing 8.7 per cent rise for the year.

Sales in its core South African business rose 9.4 per cent in the last three months of the fiscal year through June.

It said  327.2 million rand ($19m) was spent on Covid-19 related costs.