Shoprite Nigeria is looking to rebuild its retail business by opening smaller supermarkets in residential areas after financial pressures led to store closures and a major operational shake-up.
Adekunle Adebiyi, Executive Director of Investments at MBO Capital Management Limited, which invested in the business, revealed the plan during an interview on Nairametrics’ Drinks and Mics programme on Friday.
He said three outlets had resumed operations after the company temporarily closed its stores to negotiate with suppliers and settle outstanding obligations.
Adebiyi explained that the retailer intends to establish independent neighbourhood outlets instead of depending largely on supermarkets located in shopping malls. The strategy is expected to lower operating costs and allow the company to concentrate on its retail operations.
He noted that operating from rented premises can create funding challenges because Nigerian banks often prefer borrowers to provide physical assets as loan security. This reportedly complicated efforts by MBO Capital to secure financing during its acquisition of Shoprite Nigeria, despite the business generating billions of naira in revenue.
The company also struggled with rising rental expenses following the depreciation of the naira. Adebiyi disclosed that 17 of its 28 outlets had leases priced in dollars when the acquisition took place, leaving the retailer exposed to exchange-rate fluctuations.
He said rental costs should generally represent between eight and 10 per cent of supermarket revenue, but some outlets incurred significantly higher expenses.
Other difficulties included problems with stock management and the loss of access to the business management software used by Shoprite’s former parent company. Adebiyi said replacing the system required billions of naira, adding to the financial burden.
Shoprite Nigeria was acquired in June 2021 by a consortium led by Persianas Investment Limited after Shoprite Holdings of South Africa withdrew from direct ownership of its Nigerian business. The local operation later continued under Retail Supermarkets Nigeria Limited through a franchise arrangement.
The company has since been affected by high operating costs and difficult trading conditions. In March 2026, it clarified that it was not withdrawing from Nigeria but was implementing a restructuring plan that had commenced in August 2025.
As part of the recovery strategy, the retailer had earlier considered reopening its outlets at The Palms Shopping Mall and Circle Mall in Lagos, alongside adopting smaller store formats to reduce expenses on rent, power and diesel.
Shoprite has yet to reveal the number of neighbourhood stores planned, their locations or the expected opening dates.
The move signals a shift towards a smaller retail format as the company seeks to stabilise its finances and rebuild its presence in Nigeria.
