South African retailer Pick n Pay has announced its decision to exit Nigeria by selling its 51 percent stake in a joint venture as part of a strategy to restructure operations beyond its home market.
Pick n Pay Chief Executive Officer Sean Summers confirmed the move marking another significant South African firm retreating from Nigeria’s retail landscape.
Pick n Pay entered Nigeria in 2021 through a partnership with A.G. Leventis (Nigeria) established in 2016 and operated two stores. The grocery retailer took the bold step of entering the Nigerian market four years ago, even as other major retail players considered leaving.
This exit comes at a time when the federal government is seeking to attract much-needed foreign investment to the country.
The venture was originally viewed as a step into one of Africa’s largest consumer bases, targeting Nigeria’s underserved grocery retail market. However, it appears economic challenges, naira volatility, and other regulatory issues may have contributed to making it difficult for the retailer to maintain profitability and expand as envisioned. Despite this exit, Pick n Pay previously expressed optimism about Nigeria’s long-term potential, citing it as an appealing growth market.
The challenging business environment has prompted several multinational companies to reassess their operations in Nigeria. Notable exits include GSK, Procter & Gamble, Sanofi, and Kimberly-Clark, all of which have cited a range of difficulties such as foreign exchange constraints, rising energy costs, and a significant decline in consumer purchasing power due to ongoing inflation.
The retail sector has been particularly affected, with supermarkets, discount stores, and grocery outlets struggling to maintain profitability. The combination of soaring operational costs and persistent inflationary pressures is driving both large international corporations and local small and medium-sized businesses out of the market. Retailers like Woolworths and Truworths are among the South African brands that once tried to enter the Nigerian market but ultimately withdrew due to comparable challenges.
