South African retailer Pick n Pay announces its departure from the Nigerian market, selling its 51% stake in a joint venture with A.G. Leventis as part of its restructuring strategy. CEO Sean Summers confirms this decision on Monday, stating that the company’s exit aligns with a broader plan to focus outside Nigeria.
Pick n Pay, which entered Nigeria just four years ago with two stores, had initially ventured into the market despite other large retailers’ exits. The decision comes as Nigeria’s federal government seeks to attract foreign investment to boost economic stability.
Challenges Facing Consumer Goods Companies in Nigeria
Consumer goods companies in Nigeria are grappling with high inflation, which continues to erode purchasing power, and a significantly weakened naira. In June 2024, another South African retailer, Shoprite, shut down its Abuja store, citing difficult business conditions. This closure follows an earlier exit from Kano in January.
Rising costs and inflation pressures pose major profitability challenges for retail operators in Nigeria, pushing several companies—including small and medium-sized businesses—out of the market. Recently, Jumia also shut down its food delivery service, citing similar difficulties in achieving sustainable operations.
Wave of International Company Exits in Nigeria
Pick n Pay’s exit follows a trend of foreign companies withdrawing from Nigeria due to currency instability and operating challenges. Recently, Diageo sold its majority stake in Guinness Nigeria Plc, while other multinationals like GSK, Procter & Gamble, and Sanofi have also left, citing constraints like foreign exchange shortages and rising energy costs. Over the past 18 months, inflation has reached a 28-year high at 34.19%, and the naira has lost over 100% of its value in the wake of forex market changes, pushing several global companies to reconsider their presence in Nigeria.
