South African retailer, Shoprite International Limited says it will consider the potential sale of the majority stake of its Nigerian holdings, Retail Supermarkets Nigeria Limited.
This was disclosed in the company’s operational and voluntary trading update that was published this morning.
In the update, Shoprite said the results for the year do not reflect any of their operations in Nigeria as it will be classified as a discontinued operation.
“Following approaches from various potential investors, and in line with our re-evaluation of the Group’s operating model in Nigeria, the Board has decided to initiate a formal process to consider the potential sale of all, or a majority stake, in Retail Supermarkets Nigeria Limited, a subsidiary of Shoprite International Limited, the statement reads.
“As such, Retail Supermarkets Nigeria Limited may be classified as a discontinued operation when Shoprite reports its results for the year. Any further updates will be provided to the market at the appropriate time,” it added.
International supermarkets (excluding Nigeria) contributed 11.6% to group sales, and reported 1.4% decline in sales from 2018. South African operations contributed 78% of overall sales and saw 8.7% rise for the year.
As a result of lockdown, customer visits declined 7.4% but the average basket spend increased by 18.4%.
However, Nigerians have taken to social media to react to the development. According to some, 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.