Adekunle Adebiyi, executive director, investments at MBO Capital Management Limited, says there are plans for Shoprite Nigeria to reopen with standalone neighbourhood stores.
The move is part of the retailer’s plans to restructure its
operations to reduce costs and revive its business.
Adebiyi spoke on the development in an interview on
Nairametrics’ Drinks and MicsÊ»,
where he discussed the retailer’s financial
challenges and recovery plans.
Adebiyi said three Shoprite stores have reopened after the
company temporarily shut down operations to negotiate with suppliers and
address its 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 said the company would focus on smaller neighbourhood
outlets rather than rely mainly on large shopping malls.
“We’re going to be opening standalone neighbourhood stores,
which was always the plan,” Adebiyi said.
He explained that the strategy would allow the retailer to
concentrate on supermarket operations without committing substantial capital to
property development.
According to the MBO executive, supermarkets typically lease
commercial properties and invest in operational equipment, including shelves
and refrigeration systems, rather than acquire buildings.
However, he said the model posed a financing challenge
because Nigerian 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 back the credit, despite the
retailer generating billions of naira in revenue.
The investors consequently turned to alternative funding
arrangements to complete the acquisition.
FOREX PRESSURES, OPERATING COSTS WEIGH ON SHOPRITE
Adebiyi identified foreign exchange (FX) volatility as a
major factor behind Shoprite Nigeria’s financial difficulties, saying about 17
of its 28 stores had dollar-denominated rental agreements at the time of the
acquisition.
He said the depreciation of the naira subsequently increased
rental obligations and placed additional pressure on operating costs.
The executive director said rent should typically account
for about 8 percent to 10 percent of a supermarket’s revenue, but some Shoprite
locations faced substantially higher rental costs.
He also cited 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 have supported other
aspects of the business.
In August 2020, Shoprite Holdings, the South African
retailer that introduced the 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, through Ketron Investment Limited, their investment vehicle,
acquired the local operations of Shoprite on May 31, 2021.
The Shoprite franchise, operated by Retail Supermarkets
Nigeria Limited, had faced significant operational difficulties, leading to the
closure of some stores.
Shoprite had closed outlets in Abuja and Kano in previous
years, citing financial challenges and the business environment.
In December 2025, TheCable reported that 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 and announced plans to open outlets at The
Palms Shopping Mall in Oniru and Circle Mall in Jakande, Lagos.
The company described the move as part of a restructuring
programme aimed at improving its operations.
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