“Retail Supermarkets Nigeria Limited (RSNL), the operators of Shoprite Mall, has announced its decision to cease operations at its Wuse, Abuja branch. The closure, set for June 30, 2024, is attributed to the challenging business climate in Nigeria and the financial performance of the store.”

Just like Mr Price, Woolworths, and other South Africa brands which packed and left Nigeria, Shoprite 1.0 followed. But of course, some Nigerians kept the brand in the nation. Unfortunately, what brought the firm to Nigeria [expanding middle class] has since punted or even degraded, and ShopRite’s business is under severe stress.

Running a majorly-grocery chain in Nigeria is challenging, considering that every corner of the major cities has an open market. Those open markets are asymmetric competitors as they do not pay VAT, corporate taxes, etc. When the purse is heavy, you can enter Shoprite but under lite purses, open markets become the main option.

This struggle is not on Shoprite; it is a lesson for any person running a business in Nigeria. Simply, you must innovate on your pricing: “This is the age of sachetization ...”, I wrote. Shoprite has a problem because the best customer segment has shrunk: “the most significant opportunity for African B2C startups lies with consumers who earn between $4 — $8 per day … This is largely because that income band holds the highest concentration of discretionary spending power on the continent.” That band is under attack!

In 2021, I modeled that 30 million was in that band: “... about 30 million people with decent income supporting more than 200 million, using tax numbers and informal sector upper estimates.“ That number today is less than 18 million!

-Prof. N. Ekekwe

Blaming open market over Government woes, is this a joke?