Festus Akanbi
Shoprite Nigeria is planning to open standalone neighbourhood shops as a part of efforts to revive its operations, following monetary difficulties that compelled the retailer to restructure its enterprise.
Adekunle Adebiyi, the Executive Director, Investments at MBO Capital Management Limited, an investor in Shoprite Nigeria, disclosed this throughout an interview on Nairametrics’ Drinks and Mics on Friday, the place he mentioned the grocery store chain’s monetary challenges and restoration plans.
Adebiyi stated three Shoprite retailers had reopened after the corporate quickly shut its operations to negotiate with suppliers and deal with excellent monetary obligations.
“We took a very, very drastic decision to just shut everything down whilst we negotiated with suppliers. Now three stores are back open,” he stated.
He defined that the corporate deliberate to develop via smaller standalone retailers in residential neighbourhoods somewhat than relying totally on giant procuring malls.
“We’re going to be opening standalone neighbourhood stores, which was always the plan,” Adebiyi stated.
The strategy is anticipated to permit the retailer to focus its sources on grocery store operations somewhat than committing substantial capital to property growth.
Adebiyi stated supermarkets sometimes function from leased premises, with investments centered on gear resembling cabinets and refrigeration techniques.
However, he famous that this enterprise mannequin may create financing difficulties in Nigeria, the place banks usually require tangible belongings as collateral for loans.
He disclosed that MBO Capital encountered challenges securing financial institution financing in the course of the acquisition of Shoprite Nigeria as a result of lenders struggled to establish ample bodily belongings to help the transaction.
Despite the retailer producing billions of naira in income, the construction of its enterprise made it tough to get hold of standard asset-backed financing, prompting the buyers to discover different funding preparations.
Adebiyi additionally recognized international change volatility as a significant factor behind Shoprite Nigeria’s monetary difficulties.
According to him, about 17 of the retailer’s 28 shops had rental agreements denominated in {dollars} when the acquisition came about.
The depreciation of the naira subsequently elevated the price of these leases, placing further strain on the corporate’s working bills.
He stated lease ought to ordinarily account for between eight and 10 per cent of a grocery store’s income, however some Shoprite places confronted considerably increased rental prices.
The govt additionally cited operational challenges, together with weaknesses in stock administration and the lack of entry to the enterprise useful resource planning system utilized by the previous dad or mum firm.
He stated changing the system required billions of naira in further funding, diverting funds that might in any other case have been used to help the enterprise.
Shoprite’s present restoration efforts comply with a collection of operational challenges and modifications in possession.
In June 2021, a consortium led by Persianas Investment Limited accomplished the acquisition of Shoprite Nigeria after South African retailer Shoprite Holdings determined to exit direct possession of its Nigerian operations.
The enterprise subsequently continued beneath Retail Supermarkets Nigeria Limited via a franchise association.
The retailer later confronted additional strain from rising working prices and tough buying and selling situations. In June 2024, Nairametrics reported the closure of its outlet at Novare Wuse Central Mall in Abuja.
In March 2026, Shoprite informed Nairametrics that it was not leaving Nigeria however implementing a phased restructuring programme that started in August 2025.
The Chief Strategy Officer at Retail Supermarkets Nigeria Limited, Bunmi Adeleye, had additionally disclosed plans to reopen retailers at The Palms Shopping Mall and Circle Mall in Lagos whereas exploring smaller neighbourhood retailer codecs to scale back bills on lease, electrical energy and diesel.
However, the corporate has but to disclose the variety of new neighbourhood retailers it intends to open, their proposed places or a timeline for the growth.
