Shoprite Nigeria is planning to open standalone neighbourhood stores as part of a recovery strategy following financial difficulties that forced the retailer to restructure its operations. Adekunle Adebiyi, Executive Director, Investments at MBO Capital Management Limited, an investor in Shoprite Nigeria, said the company had taken the decision to temporarily shut all operations while negotiating with suppliers and addressing outstanding financial obligations. Three outlets have since reopened following this restructuring effort.
The company plans to expand through smaller standalone outlets in residential neighbourhoods rather than relying primarily on large shopping malls. This approach is intended to allow Shoprite to concentrate resources on supermarket operations rather than committing substantial capital to property development. Supermarkets typically operate from leased premises, with investments focused on equipment such as shelves and refrigeration systems. However, this business model has created financing difficulties in Nigeria, where banks often require tangible assets as collateral for loans. MBO Capital encountered challenges securing bank financing during the acquisition of Shoprite Nigeria because lenders struggled to identify sufficient physical assets to support the transaction.
Foreign exchange volatility emerged as a major factor behind Shoprite Nigeria's financial difficulties. According to Adebiyi, about 17 of the retailer's 28 stores had rental agreements denominated in dollars at the time of acquisition. The subsequent depreciation of the naira increased the cost of those leases, putting additional pressure on operating expenses. Rent should ordinarily account for between 8 and 10 per cent of a supermarket's revenue, but some Shoprite locations faced substantially higher rental costs. The company also faced operational challenges, including weaknesses in inventory management and loss of access to the enterprise resource planning system used by the former parent company, which required billions of naira in additional investment to replace.
Shoprite's recovery efforts follow a series of ownership and operational changes. In June 2021, a consortium led by Persianas Investment Limited completed the acquisition of Shoprite Nigeria after South African retailer Shoprite Holdings decided to exit direct ownership of its Nigerian operations. The business continued under Retail Supermarkets Nigeria Limited through a franchise arrangement. In June 2024, the company closed its outlet at Novare Wuse Central Mall in Abuja amid rising operating costs and difficult trading conditions. In March 2026, Shoprite stated it was not leaving Nigeria but implementing a phased restructuring programme that began in August 2025. The company plans to reopen outlets at The Palms Shopping Mall and Circle Mall in Lagos while exploring smaller neighbourhood store formats to reduce expenses on rent, electricity and diesel. However, Shoprite has yet to disclose the number of new neighbourhood outlets it intends to open, their proposed locations or a timeline for the expansion.