South African retailer Pick n Pay has announced its decision to exit the Nigerian market, selling its 51% stake in a joint venture. This move is part of a broader strategy to restructure its operations outside of South Africa. The company’s CEO, Sean Summers, confirmed this development, highlighting the ongoing trend of major South African retailers retreating from Nigeria’s retail landscape.
Pick n Pay initially ventured into Nigeria in 2021, having partnered with A.G. Leventis (Nigeria) in 2016. At that time, the company operated two stores, viewing this expansion as a significant step into one of Africa’s largest consumer markets. The retailer aimed to tap into Nigeria’s underserved grocery retail sector, which presented substantial opportunities for growth.
Despite the initial optimism surrounding its entry, various economic challenges have emerged. Issues such as naira volatility and regulatory hurdles have created significant obstacles for Pick n Pay, making it increasingly difficult to achieve profitability and expand as planned. These challenges have contributed to the retailer’s decision to withdraw from the market.
Read Also: North Blackout: 19 Governors Meet, President Sends Troops Against Vandals
Even with this exit, Pick n Pay had previously expressed a positive outlook on Nigeria’s long-term potential. In 2020, David North, the Group Executive for Strategy and Corporate Affairs, emphasized that Nigeria’s consumer market remains largely underserved and offers considerable growth prospects. This perspective reflected the retailer’s initial enthusiasm about the opportunities available in the country.
North also pointed out that Pick n Pay’s strategy differed from that of other South African retailers. The company focused on establishing smaller neighborhood stores rather than flagship outlets in large shopping centers. This approach was intended to leverage A.G. Leventis’ local expertise to better navigate Nigeria’s complex regulatory and business environment.
Unfortunately, despite these tailored efforts, the operational hurdles proved too significant to overcome. The challenging economic conditions in Nigeria have also affected other multinational companies, leading to a gradual exodus from the country. Many businesses across various sectors have opted to leave, citing factors such as currency instability and unfavorable market conditions.
As Pick n Pay steps back from Nigeria, it underscores a broader trend of South African retailers reassessing their strategies in the region. The exit not only reflects the difficulties faced by the company but also highlights the ongoing challenges in Nigeria’s retail sector, which continues to struggle with economic instability and regulatory complexities.
