South African retail company, Shoprite Holdings Limited, has discplosed that the Company was engaging Nigerian investors in expanding its operations.
The Company explained that following approaches from various potential investors, and in line with its re-evaluation of the Group’s operating model in Nigeria, the Board 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.
As such, Retail Supermarkets Nigeria Limited may be classified as a discontinued operation when Shoprite reports its results for the year.
Meanwhile, the company said despite difficult circumstances, in a year incorporating the COVID-19 lockdown and accompanying regulations governing trade, transport and operations, the Group increased total sale of merchandise for the 52 weeks to 28 June 2020 (including the impact of hyperinflation in the prior year) by 6.4 per cent to approximately R156.9 billion. Like-for-like growth for the year was 4.4 per cent.
Also, as at the year ended June 30, 2020 the Company reported Supermarkets republic of South Africa (RSA) sales growth (inclusive of liquor) of 8.7 per cent for the year was underpinned by a strong second half, in which sales grew 7.5 per cent, notwithstanding a high second half base in the prior year during which fourth quarter sales grew by 9.4 per cent.
In equally, if not more difficult circumstances resulting from COVID-19 lockdown regulations, Supermarkets Non-RSA’s second half reported an increase in sales of 0.1 per cent, resulting in an overall decline in sales of 1.4 per cent for the year but in constant currency increased by 6.6 per cent.
The Company noted that “Given the comment regarding the pending classification of Nigeria as a discontinued operation, Supermarkets Non-RSA (excluding Nigeria) contributing 11.6 per cent to Group sales, recorded a decline in sales of 1.4 per cent for the year.
“Second half constant currency sales growth of 6.3 per cent was significantly impacted by lockdown regulations across the 14 African countries in which we trade. Lockdown restrictions pertaining to store closures; social distancing; transport restrictions; the movement of people; trading hours; workforce limitations and trade in alcohol impacted various regions to differing degrees at different times.”
The Company in a release signed by general manager of Shoprite Group, Nigeria, Carl Erickson, said that retail supermarket in the country has shown great promise since its inception in 2002 and the expansion of the food retail business in Nigeria to a greater consumer market should remain everybody’s shared vision.
It added that “This is why the Company is engaging Nigerian investors who share in this vision and in so doing we will be creating a truly Nigerian business run and owned by Nigerians for the Nigerian market.
“We have identified interested Nigerian investors and we will now explore various possibilities of making it a reality. Our experienced management together with the new investors will continue to build the business in Nigeria.”