Updated: Aug 29, 2020
Officially, Shoprite is classifying Nigeria as “discontinued operations” and has decided to initiate a formal process to consider the potential sale of all, or a majority stake in its Nigerian business. Trendtype.com understands it has advanced negotiations with a new start-up retail chain, JARA, to take over its business. JARA (officially EDLP Nigeria Ltd) is Nigeria’s first discounter.
Nigerian owned, it is started and headed by Dutchman Willem Snollaerts, executive partner at Discount Retail Consulting GmbH, who previously ran discounters in Russia and was board member at the Aldi discount chain in the Netherlands for more than a decade. JARA has two stores at the moment – one in Ikeja (Lagos) and another in Benin City. If it acquired the Shoprite network it would become the largest supermarket chain in Nigeria.
Shoprite opened its first store in Nigeria in 2005. It has since built a chain of 26 stores in the country, and is the clear market leader in the Nigerian supermarket sector.
In March 2020 Shoprite revealed it had lost 8.1% of its sales in constant currency terms at the end of the second half (H2) of 2019. CEO Pieter Engelbrecht has already warned that the retailer is looking to exit underperforming countries.
Sales in Nigeria were also hit by a wave of reprisal attacks against Shoprite, a visibly South African brand, because of xenophobic attacks on Nigerians in South Africa. In Onitsha, Lagos, Ibadan and Kano attacks on Shoprite stores included arson attempts and threats of violence. A meeting at the time between President Muhammadu Buhari’s Senior Special Assistant on Foreign Affairs and Diaspora, and the National Association of Nigerian Students (NANS) ended with a resolution that MTN Nigeria, MultiChoice, Shoprite and other South African companies in Nigeria should cease operations in Nigeria. It is hard to overstate how strongly the feeling was received in South Africa that Shoprite would be vulnerable to political interference as well as its existing financial challenges.
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