Shoprite Nigeria plans to reopen with standalone neighbourhood stores as part of efforts to restructure its operations, reduce costs and revive its business.
This was disclosed by Adekunle Adebiyi, Executive Director, Investments at MBO Capital Management Limited, in an interview on Nairametrics’ Drinks and Mics, where he spoke on the retailer’s financial challenges and recovery strategy.
Adebiyi said the company took the decision to temporarily shut down operations to renegotiate with suppliers and address 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,” he said.
According to Adebiyi, Shoprite will no longer rely mainly on large shopping malls. Instead, it will open standalone neighbourhood stores.
A standalone neighbourhood store is a supermarket located on its own or within a small community area, closer to where people live, rather than inside a big shopping complex like Ikeja City Mall or The Palms.
Unlike the mall-based model that requires large space, high dollar-denominated rent and heavy foot traffic from other shops, neighbourhood stores are smaller, cheaper to run, and focused on daily grocery needs of residents in that immediate area.
“We’re going to be opening standalone neighbourhood stores, which was always the plan,” Adebiyi said.
He explained that the strategy would allow the retailer to focus on core supermarket operations without committing huge capital to property development.
He noted that supermarkets typically lease commercial properties and invest only in operational equipment such as shelves and refrigeration systems, rather than acquiring buildings.
However, he said the model poses a financing challenge in Nigeria because banks prefer lending to businesses with tangible assets that can serve as collateral.
Adebiyi said MBO Capital faced difficulties securing bank financing during the acquisition of Shoprite Nigeria because lenders could not identify sufficient assets to back the credit, despite the retailer generating billions of naira in revenue. The investors therefore turned to alternative funding arrangements.
Adebiyi identified foreign exchange volatility as a major factor behind Shoprite’s difficulties, revealing that about 17 of its 28 stores had dollar-denominated rental agreements at the time of acquisition.
He said naira depreciation increased rental obligations and pressured operating costs. Rent should typically account for about 8 to 10 percent of a supermarket’s revenue, but some Shoprite locations faced much higher costs.
He also cited operational weaknesses, including inventory management problems and loss of access to the former parent company’s enterprise resource planning (ERP) system, which required billions of naira to replace.
In August 2020, Shoprite Holdings, the South African parent company, announced plans to exit Nigeria after a sustained decline in sales.
MBO Capital, alongside co-investors led by Persianas Investment Ltd, through Ketron Investment Limited, acquired the local operations on May 31, 2021.
The franchise, operated by Retail Supermarkets Nigeria Limited, later closed outlets in Abuja and Kano, citing financial challenges.
In December 2025, TheCable reported that the Lagos State Internal Revenue Service sealed Shoprite’s Ikeja City Mall outlet over alleged tax non-compliance.
In March 2026, 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, as part of its restructuring programme.