The retailer, which is based in Cape Town, South Africa, has started the formal process to consider the sale of all or a majority stake in its shares in Nigeria.
This was revealed in a trading statement for the 52 weeks (1 year) to end the month of June, which was released on Monday, 3 August.
Shoprite’s exit will now be the first in the past few years as the Nigerian markets have become so hostile that Mr Price and Woolworths also exited the country a few years ago.
In the same trading statement, the retailing giant said that the recently released results do not reflect their operations in Nigeria as it will be classified as a discontinued operation.
International supermarkets (excluding Nigeria) contributed 11.6% to group sales and reported a 1.4% decline in sales from 2018. South African operations contributed 78% of overall sales and saw an 8.7% rise for the year.
Nigerians have now taken to social media to react to the news, with many saying what is obvious: this is definitely not good news.
See the reactions below:
In South Africa and Nigeria, Shoprite caters to a lower middle class population. This means Nigeria's lower middle class population has reduced so much that even they can no longer cover Shoprite's cost of doing business. Sigh. https://t.co/0O6GqVGfcm
— Ayo Sogunro – #Transformist (@ayosogunro) August 3, 2020
The Board of Africa's biggest retailer, Shoprite, has announced plans to discontinue operations in Nigeria after 15 years in. While this may open up opportunities for local investors in that sector, it is a bad pointer to what Nigeria has become as an investment destination. pic.twitter.com/GYTTIrHrmM
— Ayò-Bánkólé Akíntújoyè (@AyoBankole) August 3, 2020
Cost of doing business is so high in Nigeria. You provide your own power, your own water etc…
Costs just keeps getting higher and higher.
The unfortunate thing about this Shoprite debacle is the huge loss to staff, contractors and supplier.
An unfortunate domino effect.
— the Morris Monye factor (@Morris_Monye) August 3, 2020
So shoprite is leaving Nigeria,thousands of people will be without jobs now,other thousands depending on those people’s incomes,my new neighbor works with shoprite in Ibadan&he has 3kids,his wife is a private school teacher and haven’t worked in a while,so many people like that????
— Oyindamola? (@dammiedammie35) August 3, 2020