Shoprite Nigeria is plotting a comeback with plans to open smaller neighbourhood stores after financial troubles forced the supermarket chain to temporarily shut its operations and negotiate with suppliers.
The retailer has already reopened three outlets following a drastic shutdown aimed at resolving outstanding financial obligations and stabilising its struggling business.
Adekunle Adebiyi, Executive Director, Investments at MBO Capital Management Limited, an investor in Shoprite Nigeria, disclosed the recovery plan during an interview on Nairametrics’ Drinks and Mics programme on Friday.
“We took a very, very drastic decision to just shut everything down whilst we negotiated with suppliers. Now three stores are back open,” Adebiyi said.
He explained that the company would now focus on smaller, standalone supermarkets in residential neighbourhoods rather than depend heavily on large shopping malls.
“We’re going to be opening standalone neighbourhood stores, which was always the plan,” he added.
The new strategy is expected to reduce the retailer’s financial burden by allowing it to concentrate on supermarket operations instead of tying up huge sums in property development and expensive commercial locations.
DOLLAR RENTS, NAIRA CRISIS HIT SHOPRITE
Adebiyi identified foreign exchange volatility and rising rental costs as major factors behind the company’s financial difficulties.
According to him, about 17 of Shoprite Nigeria’s 28 stores had dollar-denominated rental agreements when the investors acquired the business.
The naira’s depreciation subsequently drove up rental expenses, placing additional pressure on the retailer’s finances.
Adebiyi said rent should ordinarily account for between eight and 10 per cent of a supermarket’s revenue, but some Shoprite outlets faced considerably higher costs.
The company also encountered difficulties securing conventional bank loans despite generating billions of naira in revenue.
This, he explained, was partly because supermarkets typically operate from leased properties, with their investments concentrated on shelves, refrigeration equipment and other operating assets rather than buildings that banks can readily accept as collateral.
MBO Capital reportedly struggled to secure financing during the acquisition because lenders could not identify enough physical assets to support the transaction, forcing the investors to explore alternative funding arrangements.
BILLIONS SPENT ON NEW SYSTEM
Beyond rental expenses and financing difficulties, Shoprite also faced operational setbacks, including weaknesses in inventory management and the loss of access to the enterprise resource planning system used by its former parent company.
Adebiyi said replacing the system required billions of naira, putting further pressure on the retailer’s finances and diverting resources that could have supported its operations.
The challenges have forced the company to reconsider its business model as it attempts to regain its footing in Nigeria’s competitive retail market.
HOW SHOPRITE GOT HERE
Shoprite Nigeria changed ownership in June 2021 after South African retail giant Shoprite Holdings decided to exit direct ownership of its Nigerian operations.
A consortium led by Persianas Investment Limited completed the acquisition, with the business subsequently operating under Retail Supermarkets Nigeria Limited through a franchise arrangement.
However, rising operating costs and difficult trading conditions continued to weigh on the business. In June 2024, an outlet at Novare Wuse Central Mall in Abuja was reported to have closed.
In March 2026, Shoprite told Nairametrics that it was not leaving Nigeria but implementing a phased restructuring programme that began in August 2025.
Bunmi Adeleye, Chief Strategy Officer at Retail Supermarkets Nigeria Limited, had also disclosed plans to reopen outlets at The Palms Shopping Mall and Circle Mall in Lagos, while exploring smaller neighbourhood stores to cut spending on rent, electricity and diesel.
The latest plan signals another attempt to rebuild the retailer’s presence by bringing supermarkets closer to residential communities and reducing the cost of running its outlets.
However, the company has yet to announce how many neighbourhood stores it intends to open, where they will be located or when the expansion will begin.
