Shoprite Nigeria plans to reopen more outlets through standalone neighbourhood stores as the retailer restructures its operations to cut costs and revive its business.
Adekunle Adebiyi, executive director of investments at MBO Capital Management Limited, disclosed this in an interview on Nairametrics’ Drinks and Mics, where he discussed the supermarket chain’s financial challenges and recovery plans.
Adebiyi said three Shoprite stores had reopened after the company temporarily shut down operations 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 added that the retailer would prioritise smaller neighbourhood outlets rather than rely primarily on large shopping malls.
“We’re going to be opening standalone neighbourhood stores, which was always the plan,” Adebiyi said.
Why Shoprite Is Changing Its Business Model
According to Adebiyi, the neighbourhood-store strategy would allow Shoprite to focus on supermarket operations without committing substantial capital to property development.
He explained that supermarkets typically lease commercial properties and invest in operational equipment, such as shelves and refrigeration systems, rather than purchase buildings.
However, he said the model creates financing challenges in Nigeria because banks generally prefer lending to businesses with tangible assets that can serve as collateral.
Adebiyi said MBO Capital encountered difficulties securing bank financing during the acquisition of Shoprite Nigeria because lenders struggled to identify sufficient assets to support the credit, despite the retailer generating billions of naira in revenue.
The investors subsequently explored alternative funding arrangements to complete the acquisition.
Forex Pressures, High Costs Weigh on Shoprite
Adebiyi identified foreign exchange volatility as a major factor behind Shoprite Nigeria’s financial difficulties.
He said about 17 of the retailer’s 28 stores had dollar-denominated rental agreements when the acquisition took place. The subsequent depreciation of the naira increased rental obligations and intensified pressure on operating costs.
According to the MBO executive, rent should typically account for between 8 and 10 per cent of a supermarket’s revenue. However, some Shoprite locations faced significantly higher rental costs.
He also highlighted operational weaknesses, including inventory management problems and the loss of access to the former parent company’s enterprise resource planning (ERP) system.
Adebiyi said replacing the system required billions of naira in additional investment, diverting funds that could otherwise have supported other areas of the business.
Shoprite Nigeria’s Ownership and Restructuring
In August 2020, Shoprite Holdings, the South African retailer that introduced the supermarket chain to Nigeria, announced plans to exit the market after reporting a sustained decline in sales.
MBO Capital, alongside co-investors led by Persianas Investment Ltd, acquired the Nigerian operations through Ketron Investment Limited, their investment vehicle, on 31 May 2021.
The franchise, operated by Retail Supermarkets Nigeria Limited, subsequently faced operational difficulties that led to the closure of several outlets.
Shoprite had previously shut stores in Abuja and Kano, citing financial challenges and the business environment.
In December 2025, the Lagos State Internal Revenue Service sealed Shoprite’s outlet at Ikeja City Mall over alleged non-compliance with tax obligations.
In March 2026, Retail Supermarkets Nigeria Limited dismissed reports of a nationwide shutdown and announced plans to open outlets at The Palms Shopping Mall in Oniru and Circle Mall in Jakande, Lagos.
The company described the planned openings as part of a restructuring programme aimed at improving its operations.
The proposed neighbourhood-store model represents another step in Shoprite Nigeria’s efforts to reduce operating costs and rebuild its business.
