The easing of the COVID-19 restriction measures has led to a recovery in the general sales of new and used goods (shopping) as its value increased year-on-year by 9.3 percent to N9.76 trillion in 2021, a new report shows.
BusinessDay analysis of the report, titled ‘Retailing in 2021: The big picture’, by Euromonitor International, a London-based strategic market research firm, shows that the 2021 sales value is higher than that of 2019 (N 9.42 trillion) and also the highest in six years.
A breakdown of the data shows that store-based retailing and non-store retailing (online) recorded N9.58 trillion and N178.2 billion respectively.
“In 2021, the supply-chain disruptions that marked 2020 did not reoccur, while restrictions on movement no longer curtailed footfall,” the report said.
It said the economy rebounded from the shock of the pandemic, confidence revived and consumers started spending again. “However, the economic hangover from the pandemic lingered, particularly for those on low incomes.”
Uchenna Uzo, a faculty director at the Lagos Business School, said more people had embraced e-commerce not just from the consumer side but also from the retail side.
“More people who were into only brick-and-mortar retailing have now been able to integrate some form of e-commerce or digital selling into their trading activity which has helped,” he said.
Following the outbreak of the pandemic in 2020, lockdown and restriction measures were introduced in 2020 to combat the spread of the virus. But the consequences of those measures led to macroeconomic volatility, rapid naira’s depreciation, weak purchasing power and household incomes which affected the trade sector.
The sector, which is the second biggest by output production, can be described as the barometer of consumer purchasing power. The higher the level of consumption, the better the sector performs.
The ease of the restrictions also led the sector to record its first positive growth in six years. Data from the National Bureau of Statistics show that its growth rate stood at 8.62 percent in 2021 from 8.49 percent, -0.38 percent, -0.63 percent, -1.05 percent and -0.24 percent in 2020, 2019, 2018, 2017 and 2016 respectively.
A recent report by FBNQuest showed that Nigeria’s real household consumption as a proportion of Gross Domestic Product rose to 76 percent in 2021, the highest level since 2010. According to the report, the surge led to a fast recovery post pandemic for Nigeria’s consumer’s industry.
The Euromonitor report also highlighted that Jumia, Shoprite, Spar, Everyday supermarkets and Sahad stores were the five top-performing retail brands.
Others are Addide supermarkets, Game, MarketSquare, Zinox Group and Slot.
Christele Chokossa, a consultant at Euromonitor International, said winning in the Nigerian retailing landscape requires operators to build a robust brand equity to build a loyal consumer base, financial strength to navigate economic instabilities such as inflation and currency depreciation, and a viable logistic capacity to access the supply chain and consumers’.
“Those elements have been successfully incorporated in Jumia, Shoprite and Spar strategies, hence, their leadership in the market.”
For shopping sales in 2022, the report forecasts that its value is expected to portray double-digit growth rates.
It said: “While strong population growth and rapid urbanisation will continue to drive growth in retail current value sales in Nigeria, a lack of formal employment opportunities will continue to restrict the purchasing power of local consumers.
“E-commerce will continue to grow in popularity during the forecast period, as smartphone ownership continues to grow; investment in internet retail increases and more store-based retailers shift towards an omnichannel model; and consumers become more comfortable with online shopping and cashless payment methods.”