Shoprite Nigeria is planning to expand its operations through smaller neighbourhood supermarkets following a major restructuring exercise aimed at addressing financial challenges and restoring business growth.
The development was disclosed by Adekunle Adebiyi, Executive Director of Investments at MBO Capital Management Limited, an investor in Shoprite Nigeria, during an interview on Nairametrics’ Drinks and Mics programme on Friday.
According to Adebiyi, three outlets have reopened after the company temporarily suspended operations to negotiate with suppliers and resolve outstanding financial obligations.
He explained that the retailer intends to establish standalone supermarkets in residential areas instead of depending mainly on large shopping malls.
The strategy is expected to reduce operating expenses and enable the company to focus more resources on its core supermarket business.
Adebiyi noted that supermarkets typically operate from rented premises, with investments concentrated on essential facilities such as shelving, refrigeration and other store equipment.
However, he identified access to financing as one of the challenges facing the business in Nigeria. He explained that banks often require tangible assets as collateral, making it difficult for companies that rely heavily on leased properties to secure conventional loans.
He disclosed that MBO Capital Management encountered similar difficulties while arranging financing for the acquisition of Shoprite Nigeria, despite the retailer generating billions of naira in revenue.
Foreign exchange volatility has also contributed to the company’s financial difficulties. Adebiyi said approximately 17 of Shoprite’s 28 stores had rental agreements denominated in US dollars at the time of the acquisition.
The subsequent depreciation of the naira increased the cost of those leases, placing additional pressure on the company’s operating expenses.
According to him, rent should generally account for between
Other challenges included weaknesses in inventory management and the loss of access to the enterprise resource planning system previously provided by its former parent company. Replacing the system required additional investment running into billions of naira, further straining the business.
Shoprite Nigeria underwent a change in ownership in June 2021, when a consortium led by Persianas Investment Limited acquired the business after South African retailer Shoprite Holdings decided to withdraw from direct ownership of its Nigerian operations.
The company subsequently continued operating under Retail Supermarkets Nigeria Limited through a franchise arrangement.
Its operations have since faced mounting costs and difficult trading conditions, resulting in the closure of some outlets. In June 2024, the closure of its store at Novare Wuse Central Mall in Abuja was reported.
However, the company clarified in March 2026 that it had no plans to leave Nigeria, describing its actions as part of 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, alongside efforts to introduce smaller neighbourhood stores.
The proposed format is expected to help reduce expenses associated with rent, electricity and diesel while making the retailer’s services more accessible to residents.
Despite the planned expansion, Shoprite has yet to announce the number of neighbourhood stores it intends to establish, their proposed locations or when the new outlets will open.
The success of the strategy will depend on the company’s ability to manage operating costs, strengthen its supply chain and adapt to Nigeria’s challenging business environment.
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