All 25 outlets of food retailer, Shoprite, have been shut down in Nigeria by workers who are currently embarking on an industrial action over the sale of the company to Tayo Amusan’s Jara.
The contract papers signed by staff show that many of the staff were to work with Shoprite South Africa until between 2035 and 2040.
But with the current management set to exit in June, the staff demanded to be paid off rather than run the risk of sack after they’re transferred to a new Nigerian company; a demand Shoprite has been uninterested in.
In August 2020, Shoprite announced the commencement of a formal process to discontinue its operations in Nigeria “following approaches from various potential investors, and in line with our re-evaluation of the group’s operating model in Nigeria.”
Cheta Nwanze, partner at SBM Intelligence, a Lagos-based consultancy, had said at that time that Shoprite’s move to hand over to a new investor was a reflection of how “toxic” Nigeria’s business environment had become as “the middle class shrinks, and the government harasses business more to fill dwindling coffers.”
Shoprite’s margins in Nigeria are thin — costs of [importing items] have been getting worse. With the state of our currency, prices need to go up.
Problem is they also see that purchasing power is tanking, even amongst their small aspirational middle-class segment. So who will buy when they raise prices?
Shoprite Nigeria operates about 25 outlets across the country and employs over 2,000 employees, a substantial number of whom are Nigerians.
Amusan, meanwhile, owns Persianas Nigeria Limited, a property development company he founded in 1990 and in 2004, he launched The Palms.
Following the success of The Palms in Lagos, he floated three additional malls in Enugu, Kwara, Ota and Ibadan.