Shoprite, has expressed worries that lack of growth in the Nigerian property development sector would halt its Nigerian expansion.
The behemoth South African retail chain says its plans to expand in Nigeria are being slowed by a lack of available sites.
Here is how Bloomberg reported it:
Nigeria, with more than 160 million people, could eventually carry about the same number of stores as Shoprite has in South Africa, Chief Executive Officer Whitey Basson said in a presentation in Johannesburg yesterday. South Africa’s largest retailer, which has more than 800 stores in its home market, is in the process of adding 37 stores to the seven it already has in the West African country.
“Nigeria could handle 600 to 800 stores if you look at the size of the cities,” Basson said. “Growth in Nigeria can go quickly, but that’s not dependent on Shoprite, but on sites. Non-South Africa property development is slower than we like.”
In addition to a lack of available property, supply lines outside of South Africa “remain a huge challenge,” Basson said. Shoprite’s lead time in Nigeria is 117 days and the retailer is considering building a distribution center in the west African country.