Shoprite Nigeria is planning to open standalone neighbourhood shops as a part of efforts to revive its retail operations, shifting away from its conventional reliance on giant procuring malls.
Adekunle Adebiyi, Executive Director, Investments at MBO Capital Management Limited, disclosed this throughout an interview on Nairametrics’ Drinks and Mics, the place he mentioned the retailer’s monetary challenges, restructuring efforts and plans for restoration.
According to Adebiyi, three Shoprite shops have reopened following a brief shutdown of operations to enable the corporate to negotiate with suppliers and deal with its 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.
Shoprite plans standalone neighbourhood shops
He defined that the corporate intends to develop by smaller, standalone neighbourhood shops somewhat than relying totally on procuring malls, a method he described as according to its authentic marketing strategy.
- “We’re going to be opening standalone neighbourhood stores, which was always the plan,” Adebiyi mentioned.
He famous that the technique would enable Shoprite to focus on retail operations with out committing substantial capital to property improvement.
- Adebiyi defined that the standard grocery store mannequin depends on leasing appropriate business properties somewhat than buying buildings outright.
- He mentioned retailers may negotiate long-term leases, typically extending to 10 years, and make investments primarily in cabinets, refrigeration tools and different operational infrastructure.
- According to him, this method differs from the expectations of Nigerian banks, which generally favour companies with substantial fastened belongings that may function collateral.
- He disclosed that MBO Capital encountered difficulties securing financial institution financing in the course of the acquisition of Shoprite Nigeria as a result of lenders struggled to determine enough tangible belongings towards which to present credit score.
Despite Shoprite producing billions of naira in income, its enterprise mannequin didn’t match typical asset-backed lending necessities.
Consequently, the traders turned to different funding preparations to full the acquisition.
Shoprite faces financing and foreign exchange challenges
Adebiyi additionally recognized international change volatility as a significant factor behind Shoprite Nigeria’s monetary difficulties.
He revealed that roughly 17 of the retailer’s 28 shops had dollar-denominated rental agreements on the time of the acquisition.
The subsequent depreciation of the naira considerably elevated rental obligations, inserting further strain on working prices.
According to him, lease ought to ordinarily account for roughly 8% to 10% of a grocery store’s income. However, some Shoprite areas skilled considerably greater rental prices.
Beyond international change pressures, Adebiyi acknowledged operational shortcomings, together with weaknesses in stock administration and the lack of entry to the previous mother or father firm’s enterprise useful resource planning system.
He mentioned changing the system required billions of naira in further funding, diverting funds that might in any other case have supported the enterprise.
What it is best to know
The proposed neighbourhood-store expansion represents the following section of that restoration technique, though the corporate has not disclosed the variety of deliberate shops, their areas or a gap timeline.
As beforehand reported by Nairametrics, Ketron Investment Limited, a consortium led by Persianas Investment Limited, accomplished the acquisition of Shoprite Nigeria in June 2021, following the South African retailer’s resolution to exit direct possession of the Nigerian enterprise.
- The transaction noticed Retail Supermarkets Nigeria Limited take over operations underneath a franchise association, with MBO Capital Management Limited among the many advisers concerned within the acquisition.
- In June 2024, Nairametrics reported that Shoprite announced the closure of its Wuse store at Novare Wuse Central Mall in Abuja, citing the prevailing enterprise local weather and the outlet’s monetary efficiency.
- The retailer’s challenges continued into 2025, with reviews of short-term retailer closures and operational disruptions linked to working capital constraints, electrical energy prices and different bills.
- However, in March 2026, Shoprite informed Nairametrics that it was not exiting Nigeria however implementing a phased restructuring programme that started in August 2025.
Bunmi Adeleye, Chief Strategy Officer at Retail Supermarkets Nigeria Limited, disclosed plans to reopen shops at The Palms Shopping Mall and Circle Mall in Lagos whereas exploring smaller neighbourhood retailer codecs to scale back rental, electrical energy and diesel bills.
