At a time when many South African companies are either scaling back their involvement in Nigeria or leaving the country, supermarket giant Pick n Pay says it is entering the market.
Retailers such as Shoprite and Mr Price, which have been active in the West African nation for years, have found the going tough due to a troubled economy, limited middle-class consumer spending, currency devaluations and a difficult regulatory environment.
But Pick n Pay believes it can overcome those obstacles with a different strategy and sees potential in the market.
Hugely underserved consumer market
“The appeal is that it is a hugely underserved consumer market and is going to grow. You have to look through the short term and into the long-term potential,” Group Executive for Strategy and Corporate Affairs, David North, said.
He added that Pick n Pay’s approach in Nigeria will differ from other South African retailers that opened flagship stores in the large shopping centres.
Instead, the company will open smaller neighbourhood stores and will use its partnership with local company AG Leventis to obtain what North described as “the local know-how, the understanding of the regulatory process and the local stakeholders”.
Leventis was, at one time in the 1970s and 80s, a major supermarket and department store player in Nigeria and a large employer. But it eventually exited the retail sector along with other big players such as Kingway and UTC.
A long-standing interest in Nigeria
More recently, though, it has signalled a re-entry to that market and, according to some observers, may even have stores operating in time for the Christmas shopping rush.
Pick n Pay has been talking for several years, probably as far back as 2014, about entering the Nigerian market, but this has never come to fruition.
It has also been planning a much-delayed involvement in Ghana and is said to have secured leases at three new and yet-to-be-opened malls in the capital Accra and the city of Tema.