Shoprite plans smaller neighbourhood stores to revive Nigerian business

Shoprite Nigeria plans to open smaller, standalone neighbourhood stores as it works to steady its business after a difficult stretch, an investor in the supermarket chain has said.

Adekunle Adebiyi, Executive Director of Investments at MBO Capital Management, said the shift away from large shopping malls was always the intention. He spoke in an interview on Nairametrics' Drinks and Mics programme on Friday, 23 October 2026.

According to him, three Shoprite stores have reopened after the company temporarily shut operations to negotiate with suppliers and sort out 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," Adebiyi said.

He said the neighbourhood format lets the retailer put its money into shelves, refrigeration and other store equipment rather than property. Supermarkets typically lease their premises, sometimes for as long as 10 years, instead of buying buildings outright.

Why the business struggled

Adebiyi pointed to foreign exchange volatility as a major cause of the company's problems. About 17 of Shoprite's 28 stores had rents priced in dollars when the business was acquired, he said, so the naira's fall pushed up costs sharply.

Rent should normally take about 8% to 10% of a supermarket's revenue, he said, but some Shoprite locations carried much higher rental bills.

He also acknowledged weaknesses in inventory management and the loss of access to the enterprise resource planning system that the former parent company provided. Replacing that system cost billions of naira, money that could have gone into the business.

The leasing model also made bank financing hard. Adebiyi said MBO Capital struggled to secure loans during the acquisition because lenders want tangible assets as collateral, even though Shoprite earns billions of naira in revenue. The investors had to use alternative funding arrangements.

Shoprite's Nigerian journey changed hands in June 2021, when a consortium led by Persianas Investment Limited bought the business after South Africa's Shoprite Holdings decided to exit direct ownership. Operations continued under Retail Supermarkets Nigeria Limited through a franchise arrangement.

The retailer has since closed some outlets, including its Wuse store at Novare Wuse Central Mall in Abuja in June 2024. In March 2026, it said it was not leaving Nigeria but carrying out a phased restructuring that began in August 2025. It also announced plans to reopen stores at The Palms Shopping Mall and Circle Mall in Lagos.

What happens next

Shoprite has not said how many neighbourhood stores it will open, where they will be, or when the expansion will start. For shoppers, the plan could mean smaller stores closer to home, but the company has given no timeline yet.