Shoprite Nigeria is planning to reopen with standalone neighbourhood stores as part of efforts to cut operating costs and revive its struggling business.
Adekunle Adebiyi, Executive Director of Investments at MBO Capital Management Limited, disclosed this during an interview on Nairametrics’ Drinks and Mics, where he discussed the retailer’s financial difficulties and recovery strategy.
According to Adebiyi, three Shoprite outlets have resumed operations after the company temporarily shut its stores to negotiate with suppliers and address outstanding financial obligations.
“We took a very, very drastic decision to just shut everything down whilst we negotiated with suppliers. Now three stores are back open,” he said.
He explained that the company would increasingly focus on smaller neighbourhood outlets instead of relying primarily on large stores located in shopping malls.
Adebiyi said the strategy would enable Shoprite to concentrate on supermarket operations without tying up significant capital in property development.
Under the model, supermarkets typically lease commercial spaces and invest in operational facilities such as shelves and refrigeration equipment rather than purchase buildings.
However, he noted that the approach creates financing challenges in Nigeria, where banks often prefer lending to businesses with tangible assets that can serve as collateral.
Adebiyi said MBO Capital encountered difficulties obtaining bank financing when it acquired Shoprite Nigeria because lenders struggled to identify sufficient assets to secure loans, despite the retailer generating billions of naira in revenue.
The investors subsequently explored alternative funding arrangements to complete the acquisition.
### Forex pressures, high costs hit operations
Adebiyi identified foreign exchange volatility as a major contributor to Shoprite Nigeria’s financial challenges.
He said about 17 of the retailer’s 28 stores had dollar-denominated rental agreements when the acquisition took place. The naira’s depreciation subsequently increased rental expenses, putting additional pressure on operating costs.
According to him, rent should typically account for between eight and 10 per cent of a supermarket’s revenue, but some Shoprite locations faced significantly higher rental burdens.
He also cited inventory management problems and the loss of access to the enterprise resource planning system used by the company’s former parent organisation as factors that weakened operations.
Replacing the system, he said, required billions of naira in additional investment, diverting funds that could have been deployed elsewhere in the business.
In August 2020, South African retailer Shoprite Holdings announced plans to exit Nigeria after reporting a sustained decline in sales.
MBO Capital, alongside co-investors led by Persianas Investment Limited, acquired the Nigerian operations through Ketron Investment Limited on May 31, 2021.
The business, operated by Retail Supermarkets Nigeria Limited, has since faced operational difficulties, resulting in the closure of some outlets, including stores in Abuja and Kano.
In December 2025, the Lagos State Internal Revenue Service sealed Shoprite’s Ikeja City Mall outlet over alleged non-compliance with tax obligations.
In March 2026, Retail Supermarkets Nigeria Limited dismissed reports of a nationwide shutdown, announcing plans to open outlets at The Palms Shopping Mall in Oniru and Circle Mall in Jakande, Lagos, as part of its restructuring efforts.