With over N200 billion investment in the last couple of years, Nigerian retail market is seen among the fastest growing in Sub-Saharan Africa, presenting compelling opportunities that have continued to draw interests from local and international investors and retailers.
Investment analysts and close watchers of this market link this growth to the rising sophistication of the Nigerian consumer, urbanization, improving economic conditions leading to rising purchasing power, and, to a less extent, activities of government encouraging the entry of international retailers.
These views corroborates a recent report by the Oxford Business Group (OBG), indicating that both foreign and local investors are dramatically expanding their domestic retail footprint in Nigeria.
The report notes that, Shoprite, a South African retail chain, has already opened about nine shops in Nigeria, and has outlined plans to open up to 700 stores in the country in not-too-distant future. In the same vein, Massmart, South Africa’s second-largest retailer after Shoprite, which is partly owned by Walmart, has announced its intention to increase its presence in Nigeria from two to 20 stores.
The OBG report also reveals that Spar, Europe’s largest retail network, is partnering with Nigeria-based Artee Group to tap into the local market, cutting ribbons at new outlets in Lagos and Abuja recently. “Looking ahead, the firms aim to increase their Lagos network and expand into Port Harcourt and Ota in Ogun State over the next six months,” the report adds.
These developments and the attendant opportunities are however, not without their downsides which explains arguments by experts that the developments may lead to complete disappearance of Nigeria’s traditional market, adding that the traditional market would be ignored and Nigerians would no longer purchase locally made products which, in turn, may lead a downturn for local manufacturers.
It is speculated that this argument might have led to the outright ban of certain foreign products especially textiles, from coming into the Nigerian market by the Federal Government.
Analysts are however, of the opinion that the growth constraints in the retail market arise from the absence of synergy and collaboration among investors that would provide a structured leadership for the market.
It is against the backdrop of this perceived gap that Alpha Mead Facilities and Management Services Limited, in collaboration with their foreign technical partners, Cluttons LLP, gathered together retail sector stakeholders for a one-day seminar to share Cluttons’ experience in the management of retail centres and provide useful insights into how the lessons learned could be adopted for a successful management of malls in Nigeria.
Alpha Mead is the leading facilities management company in Nigeria and, according to Femi Akintunde, the company’s MD/CEO, their interest in retail as an aspect of real estate is because they see the retail space as a recreational facility. We are facilities managers; facilities management is about creating an enabling physical environment for people to live, work and play and it is the in-thing now”, he explained.
The seminar with the theme, ‘Adopting Global Best Practices For Retail Centre Development And Management in Nigeria’, apart from creating a forum for stakeholders to network, deliberate and seek solutions to developmental hitches prevalent in the retail sector, also sought to galvanize the stakeholders into pressure groups that would lobby for favourable government policies for the sector.
There is need for players in the sector to collaborate to form an association that will push the frontiers in order to systematically grow the sector and Akintunde reasoned that the seminar could serve as a good springboard for establishing a networking platform that will help to harmonise the interest of the various stakeholders. That collaboration, he added, would contribute to the sustainable growth of the retail industry in Nigeria, hoping that it might evolve into an association like the Retail Industry Leaders Association (RILA) in Washington, USA.
Ian Gladwin, Cluttons’ Head of International operations who was also the keynote speaker at the seminar, noted that there were great opportunities in Nigeria.
By: Chuka Uroko