South African retailer Pick n Pay has announced its exit from Nigeria, selling its 51% stake in a joint venture as part of a strategy to streamline operations outside its home market. Pick n Pay CEO Sean Summers confirmed the move on Monday, marking yet another South African business pulling back from Nigeria’s retail sector, Reuters reported.
Pick n Pay entered the Nigerian market in 2021 after partnering with A.G. Leventis (Nigeria) in 2016, operating two stores in total. The venture initially aimed to tap into Nigeria’s large and underserved grocery retail market, seeing it as a promising consumer base. However, economic challenges, currency volatility, and regulatory complexities appear to have hindered the retailer’s ability to achieve its expansion and profitability targets.
Despite this exit, Pick n Pay previously showed optimism for Nigeria’s long-term potential as a growth market. In 2020, Group Executive for Strategy and Corporate Affairs David North highlighted Nigeria’s underserved consumer market and significant potential. North also emphasized that Pick n Pay’s approach, focusing on smaller neighborhood stores instead of flagship outlets in major shopping centers, was designed to leverage A.G. Leventis’ local expertise and navigate Nigeria’s regulatory landscape.
Nevertheless, these efforts have not been enough to counter recent challenges. Nigeria’s economic conditions have impacted several multinationals, leading to an exodus of companies across various sectors due to currency instability, regulatory issues, high import duties, and rising operational costs. In recent years, companies like Microsoft, Guinness, GlaxoSmithKline, and Sanofi have scaled back or exited, while South African retailers Woolworths and Truworths previously attempted Nigerian expansion only to withdraw under similar constraints.