JOHANNESBURG (The Southern African Times) – Shoprite Holdings could become the latest South African retailer to retreat from other African markets after it said on Monday that it is considering reducing or selling all of its stake in its Nigerian subsidiary.
The company has been reviewing its long-term options in Africa as currency devaluations, supply issues and low consumer spending in Angola, Nigeria and Zambia have weighed on earnings.
Shoprite, which owns more than 2,800 outlets across Africa, said in a trading update that it was pursuing the sale after reviewing its operating model and receiving approaches from various investors.
In February CEO Pieter Engelbrecht told analysts that Shoprite remained committed to the continent but not at any cost.
The market welcomed the potential exit, pushing Shoprite’s shares to their highest in nearly two months. They were up 11.4% by 1214 GMT.
Its South African supermarkets division grew by 8.7% while sales at its supermarkets outside South Africa, excluding Nigeria, fell 1.4%.
Its South African supermarkets were boosted by panic-buying at the outset of the coronavirus lockdown and significant growth at its Checkers business, which has been repositioned as a more upmarket brand and now represents 39.6% of the group’s domestic supermarket sales.