Shoprite to exit Nigeria after 15 years
Africa’s largest food retailer, Shoprite Holdings, Monday said it will be bringing down the curtain on its Nigerian operations 15 years after announcing its presence in the country.
The high-street retailer disclosed in a trading statement for the 52 weeks to the end of June issued on Monday, that it had teed off a formal process to consider the planned disposal of all, or a majority of its supermarkets in Nigeria.
Shoprite equally stated that it expected to record a fall in annual earnings triggered by an impairment charge it posted during the year, coming up to 1.3 billion according to Reuters. An impairment charge represents a steep decrease in the recoverable value of a fixed asset, often resulting from a shift in the legal or economic circumstances, or in consequence of a casualty loss from unforeseen hazards.
In November, Shoprite said it was reviewing its supermarket operations outside South Africa and would contemplate leaving certain countries if it would help correct regional sales declines.
South African retailers have been having an uneasy time in Nigeria, the continent’s largest population, with the clothier, Mr Price, announcing its exit in June and Woolworths did the same half a dozen years ago.
Shoprite declared that the results for the year do not demonstrate any of their operations in Nigeria considering that it will be classified as discontinued operation.
Its international supermarkets with the exclusion of Nigeria accounted for 11.6% of group revenues but reported 1.4% fall in sales from 2018.
South African operations provided 78% of the entire sales and witnessed an 8.7% jump for the year.
Customer traffic slowed by 7.4% on account of the coronavirus lockdown but average basket spend grew by 18.4%.
Shoprite has been facing currency-induced inflation surges in several African countries, particularly in Nigeria, where inflation has been on the rise for 10 months in a row and reached its 26-month high in June.