By Abubakar Ojima-ojo
Shoprite Nigeria is set to reopen more outlets under a neighbourhood-store model as the retailer restructures its operations to cut costs and revive its struggling business.
Adekunle Adebiyi, executive director of investments at MBO Capital Management Limited, disclosed that three stores had reopened after a temporary shutdown to negotiate with suppliers and address outstanding financial obligations.
He said the company planned to move away from relying mainly on large shopping malls and establish standalone neighbourhood supermarkets.
“We took a very, very drastic decision to just shut everything down whilst we negotiated with suppliers. Now three stores are back open,” Adebiyi said in an interview on Nairametrics’ Drinks and Mics programme.
“We’re going to be opening standalone neighbourhood stores, which was always the plan,” he added.
The restructuring is expected to help the retailer concentrate on supermarket operations without committing substantial capital to property development.
Adebiyi explained that supermarkets typically lease commercial premises and invest in operational equipment such as shelves and refrigeration systems rather than purchase buildings.
However, he said the business model had created financing difficulties because Nigerian banks often preferred lending to businesses with tangible assets that could serve as collateral.
According to him, MBO Capital encountered challenges securing bank financing when it acquired 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, rising costs hit operations
Adebiyi identified foreign exchange volatility as one of the major factors behind the retailer’s financial difficulties.
He said about 17 of Shoprite Nigeria’s 28 stores had dollar-denominated rental agreements when the investors acquired the business.
The depreciation of the naira subsequently increased the cost of meeting those obligations, putting additional pressure on the company’s finances.
Adebiyi said rent should typically account for between eight and 10 per cent of a supermarket’s revenue, but some Shoprite outlets faced substantially higher rental costs.
He also identified inventory management problems and the loss of access to the former parent company’s enterprise resource planning system as operational setbacks.
According to him, replacing the system required billions of naira in additional investment, diverting funds that could have been used to strengthen other areas of the business.
The developments highlight the financial and operational challenges confronting the retailer as it attempts to rebuild its presence in Nigeria’s competitive supermarket market.
From planned exit to restructuring
Shoprite Holdings, the South African retail group that introduced the chain to Nigeria, announced plans to exit the Nigerian market in August 2020 following a sustained decline in sales.
MBO Capital Management and co-investors led by Persianas Investment Limited subsequently acquired the local 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.
Shoprite previously shut stores in Abuja and Kano, citing financial challenges and the prevailing business environment.
In December 2025, the Lagos State Internal Revenue Service sealed the retailer’s Ikeja City Mall outlet over alleged non-compliance with tax obligations.
In March 2026, however, 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 its restructuring programme to improve operations.
The latest neighbourhood-store strategy represents another phase in the retailer’s efforts to reduce operating costs and establish a more sustainable business model.
Whether the shift will restore its former market presence will depend on its ability to manage rental expenses, secure affordable financing and resolve the operational problems that have weighed on its business.
