- Shoprite Nigeria plans to open smaller neighbourhood supermarkets to reduce operating costs and revive its business
- The retailer blamed its financial difficulties on rising dollar-denominated rents, financing challenges and costly technology replacement
- The company is yet to disclose the number of new stores it plans to open or when the expansion will begin in Nigeria
Shoprite Nigeria is planning to open smaller neighbourhood supermarkets as part of its recovery strategy after financial difficulties forced the retailer to temporarily shut its operations and renegotiate obligations to suppliers.
Adekunle Adebiyi, Executive Director of Investments at MBO Capital Management Limited, an investor in the supermarket chain, disclosed this during an interview on Nairametrics’ Drinks and Mics on Friday, October 23, 2026.
Source: UGC
Adebiyi said three outlets had resumed operations following the temporary shutdown, which allowed the company to negotiate with suppliers and address outstanding financial commitments.
“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.
Shoprite targets neighbourhood expansion
Adebiyi explained that the retailer intends to expand through standalone neighbourhood supermarkets rather than relying mainly on large shopping malls.
“We’re going to be opening standalone neighbourhood stores, which was always the plan,” he said.
The strategy is expected to reduce operating expenses and allow the company to concentrate its investments on supermarket operations instead of property development.
According to Adebiyi, supermarkets generally rent their premises and invest in equipment such as shelves and refrigeration systems.
However, he noted that this model can make it difficult to secure bank loans in Nigeria, where lenders typically require tangible assets as collateral.
He disclosed that MBO Capital encountered financing difficulties while acquiring Shoprite Nigeria because the business lacked sufficient physical assets to satisfy conventional lending requirements, despite generating billions of naira in revenue.
Dollar rents, technology costs strain operations
Adebiyi identified foreign exchange volatility as another major challenge, revealing that about 17 of the retailer's 28 outlets had dollar-denominated rental agreements when the acquisition took place.
The naira's depreciation subsequently increased rental expenses, placing additional pressure on the company's finances.
He said rent should typically account for between 8% and 10% of a supermarket's revenue, but some Shoprite locations faced significantly higher costs.
The executive also highlighted inventory management problems and the loss of access to the enterprise resource planning system previously provided by the former parent company.
Replacing the technology platform required billions of naira in additional investment, diverting resources that could have supported other business operations.
Shoprite continues restructuring
Shoprite Nigeria's recovery efforts follow changes in ownership and years of difficult trading conditions.
In June 2021, a consortium led by Persianas Investment Limited acquired the Nigerian business after South Africa's Shoprite Holdings decided to exit direct ownership. The operations subsequently continued under Retail Supermarkets Nigeria Limited through a franchise arrangement.
Source: UGC
In March 2026, Shoprite told Nairametrics that it was not leaving Nigeria but implementing a phased restructuring programme that began in August 2025.
The company had also disclosed plans to reopen outlets at The Palms Shopping Mall and Circle Mall in Lagos while exploring smaller store formats to reduce rent, electricity and diesel expenses.
Shoprite has yet to announce how many neighbourhood outlets it plans to establish, their proposed locations or when the expansion will begin.
Source: Legit.ng