Shoprite: How Nigerians can impact the economy leveraging local investors
In June 2021, Shoprite’s Nigerian operations were taken over by Ketron Investment Limited, a Nigerian company owned by a group of local investors led by property firm Persianas Investment Ltd. This acquisition resulted from Shoprite International’s divestment of its Nigerian portfolio and a shift from the ownership to the franchise model.
Over the years, Shoprite has established itself as a household name in Nigeria, generating billions of Naira/dollars in annual sales and attracting thousands of visitors into its 25 stores nationwide. Shoprite has become synonymous with shopping malls, especially in Lagos, so much so that it is now a landmark name. For example, a trip via public transport to the Ikeja City Mall or The Palms Shopping Mall in Lekki will require you to tell the driver you’re alighting at ‘Shoprite’.
So, when the story initially broke that Shoprite International was exiting Nigeria, there was a bit of panic and uncertainty around what this meant for the shopping and retail experience in Nigeria. Several people asked who would take over the company and how well they would preserve product quality.
However, in the months since ownership changed hands, Shoprite has continued to prove the solidity and consistency of its supply chain and customer service. In the final weekend of November, between the 26th and 28th, Shoprite Nigeria opened its doors for a special Black Friday sales offering, the first-ever edition since it became an entirely locally owned company. It offered customers attractive deals and gifts in all its stores nationwide, including offering up to 50 percent discount on select items. It also handed out “golden vouchers” to lucky customers who didn’t need to pay for their shopping experience and gave out special hampers to several lucky winners.
Shoprite intends to continue growing strong, setting itself up to be the most significant player in Nigeria’s retail sector, which already contributes nearly one-fifth of Nigeria’s GDP. Much of this sector is currently informal. However, with the rising middle-class and continuous expansion of the urban population, it is safe to say that the retail experience is well on its way to being fully modernised in such a way that it sets Nigeria on the global map.
One of the highlights of customer spending behaviour in the last two years since the COVID-19 pandemic hit the world is the desire to spend less but gain more value. The pandemic impacted jobs and livelihoods, making an already price-sensitive market more sensitive. We saw this as brand loyalty waned with many more challenger brands and new market entrants coming in at very low prices.
Several shopping centres were also locked down for weeks as the government restricted movement to curb the spread of the virus. However, as soon as the lockdown was lifted, activity started to pick up again. Customers returned to their routine, and foot traffic into shopping malls returned to their usual high volumes. Nevertheless, one thing remained constant: the customers’ priority of gaining the most value per Naira spent.
Much of this insight can be seen reflected in Shoprite’s strategy and, more so, in its Black Friday sales. This campaign proves that Shoprite is, above all else, committed to preserving the quality of the customer experience that has come to define its presence in Nigeria since 2005. It also highlights the retailer’s commitment to offering great products at reasonable prices, another feature for which it has become popular.
“We look forward to building an even stronger company following our acquisition and are excited about the greater impact we will achieve to the benefit of our customers and other stakeholders now and well into the future,” said Tayo Amusan, chairman, Retail Supermarkets Nigeria Limited (RSNL), upon the successful completion of the acquisition earlier in 2021.
From all indications, the company has kept its word. It continues to operate 24 of its 25 outlets across eight states in Nigeria with plans to reopen the 25th store at Circle Mall soon. It also, directly and indirectly, employs over 10,000 people, with an overwhelming majority of them being Nigerians. Beyond that, it has also maintained its relationship with more than 300 suppliers across the country while maintaining partnerships with hundreds of small businesses, farmers, and suppliers of local and international brands.