DIANNA GAMES: Shoprite exit shows Nigeria is not an easy place for business

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While there has been some progress, the country needs to unleash its potential for retail markets

In 2005, former Shoprite CEO Whitey Basson said he was not expecting any competition in Nigeria any time soon, after it took him several years to get the first store up and running in Lagos.

In 2012, Shoprite reported that sales in its supermarkets in the rest of Africa grew 28% compared with 9.8% at home. At the time it had 47 new African stores in the pipeline, most of them earmarked for Nigeria and Angola. But the ban was also one of the reasons for the slow development of malls. It included a prohibition on finished clothing, which precluded the entry of fashion retailers, which would later make up a sizeable portion of tenants in the new developments. It was finally lifted after eight years, unlocking the growth of formal retail in Nigeria.

The retail market then developed into the channels most evident today — sprawling markets, tabletop sellers and mini plazas, with formal retail growing only in recent years. The rollercoaster ride has been tough for companies, and this makes it even more important to have a business model that can roll with the punches. Many of the SA companies that have disinvested have blamed the tough operating environment rather than their own business models and strategies for their pain.

 

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