South African retailer Pick & Pay has announced plans to exit Nigeria by selling a 51% stake in its joint venture with AG Leventis, CEO Sean said, according to Reuters. Summers confirmed this on Monday. The company entered the Nigerian market five years ago and currently operates two stores in the country.
Pick n Pay’s exit is particularly notable because the company took the bold move of entering the Nigerian market in a year when other retail giants were already planning their exits. The difficult business environment has hit many international companies, with Shoprite closing its Abuja store in June 2024, following the closure of its Kano store in January of the same year.
The difficult business environment has also affected digital commerce, with Jumia recently announcing the complete suspension of its food delivery services in Nigeria. Diageo also sold a 58.02% stake in Guinness Nigeria, effectively ending its presence in the country.
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These withdrawals reflect broader economic pressures in Nigeria, where inflation has risen to 34.19%, the highest level in 28 years. The Nigerian currency suffered a significant depreciation, with the naira depreciating by more than 100% in just one year, falling from 462 naira to over 1,500 naira to the US dollar.
The difficult environment is forcing several multinational companies to reconsider their operations in Nigeria. Notable departures include GSK, Procter & Gamble, Sanofi and Kimberly-Clark. These companies cite a number of obstacles, including currency constraints, rising energy costs and a significant decline in consumer purchasing power amid continued inflation.
The retail sector has been particularly hard hit, with supermarkets, discount stores and grocery stores struggling to maintain profitability. A combination of increasing operating costs and persistent inflationary pressures continues to drive both large international companies and local small businesses out of the market.
