Shoprite revenue to take a hit, as Maryland outlet shuts down

Shoprite has shutdown operation in its Maryland branch amid declining sales that forced Shoprite South Africa to sell off the Nigerian subsidiary to Persianas.

The Nigerian operation had been affected by the nationwide lockdown induced by the coronavirus outbreak, restricting business transactions across its over twenty walk-in supermarkets.

With sales declining, Shoprite South Africa discontinued operation in Nigeria, which led to protest among workers demanding for gratuity before a new owner takes over operations and liabilities.

It’s ability to generate revenue will now further be weakened as its 25 stores will drop this year, reflecting a tough period for retail businesses in a double-digit inflation economy.

A recent statement by chairman of Retail Supermarket Nigeria Limited (RSNL) (owner of Shoprite Nigeria), Tayo Amusan, said closing operation at the Maryland Mall, Lagos, is a difficult, but necessary decision.

READ ALSO: The Palms parent company completes Shoprite Nigeria acquisition

“We have made the difficult, but necessary, decision to discontinue business operations from Maryland, for now.” Amusan said.

What you need to know

Supermarket business in Nigeria is suffering from the double-digit inflation economy, which has been weighing heavily on the purchasing power of consumers, pushing declining sales.

The cost of goods has increased, especially household consumption such as egg price which has more than doubled from N30 to N70 in Lagos and N90 in the capital of Nigeria, Abuja, within six years.

Oil price increased from N11,000 to over N25,000 between 2018 to 2021, and 50kg local rice surged to N23,000 from N20,000 in 2021, foreign-made rice hit N30,000 from N25,000.

With cost of living also impacted by lack of affordable real estate and rising transportation fare, priority of customers have changed in line with declining purchasing power, hence, affecting revenue of supermarkets.

Within two years, three Supermarket chains have exited the Nigerian market, The Game, Mr. Price and Shoprite South Africa.

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