Festus Akanbi
Shoprite Nigeria is planning to open standalone neighbourhood shops as a part of efforts to revive its operations, following monetary difficulties that pressured 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 mentioned three Shoprite retailers had reopened after the corporate quickly shut its operations to negotiate with suppliers and tackle 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 mentioned.
He defined that the corporate deliberate to develop by means of smaller standalone retailers in residential neighbourhoods moderately than relying totally on massive buying malls.
“We’re going to be opening standalone neighbourhood stores, which was always the plan,” Adebiyi mentioned.
The method is predicted to permit the retailer to focus its sources on grocery store operations moderately than committing substantial capital to property growth.
Adebiyi mentioned supermarkets sometimes function from leased premises, with investments centered on gear resembling cabinets and refrigeration methods.
However, he famous that this enterprise mannequin may create financing difficulties in Nigeria, the place banks typically 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 adequate bodily belongings to assist the transaction.
Despite the retailer producing billions of naira in income, the construction of its enterprise made it troublesome to get hold of typical asset-backed financing, prompting the buyers to discover different funding preparations.
Adebiyi additionally recognized international alternate 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 happened.
The depreciation of the naira subsequently elevated the price of these leases, placing extra strain on the corporate’s working bills.
He mentioned lease ought to ordinarily account for between eight and 10 per cent of a grocery store’s income, however some Shoprite places confronted considerably greater 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 mentioned changing the system required billions of naira in extra funding, diverting funds that would in any other case have been used to assist 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 below Retail Supermarkets Nigeria Limited by means of a franchise association.
The retailer later confronted additional strain from rising working prices and troublesome 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 advised 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 cut 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.
