Pick n Pay stores will soon start disappearing from Nigeria as the grocery retailer confirmed on Monday that it has sold its 51% share of its joint venture back to Nigerian conglomerate, A.G. Leventis.
In 2020, Pick n Pay entered Nigeria—a market it described as “risky” upon entry—through a partnership with A.G. Leventis. The South Africa-based retailer operated two walk-in stores in Victoria Island and Ikeja, Lagos, where it distributed fast-moving consumer goods (FMCGs).
While the decision to leave Nigeria could be summed up as a result of the inflation and its impact on consumer goods, yet, some of its other chain businesses outside South Africa have not been performing so well due to currency devaluation.
The retailer reported a R1.1 billion ($62.2 million) loss before tax in the half-year period ending August 25. This was significantly higher than the R837.2 million ($47 million) loss it reported the year before. The company also reported mounting debts and its liabilities being greater than assets earlier this year.
Pick n Pay’s outgoing chairman Gareth Ackerman said the performance of their core Pick n Pay business has been poor and has not met expectations.
The company will raise between R6–8 billion ($339 million–$452 million) in secondary share sales of its subsidiary FMCG business, Boxer Retail, which it acquired in 2002. With the funds, it will refinance and refocus its businesses outside of South Africa.
Pick n Pay is one of three largest grocery chains in South Africa, along with Shoprite and Spar Group. While Pick n Pay has been posting losses, its two biggest competitors—which still have a presence in Nigeria—have been thriving in the market which is likely due to their established presence in different regions in the country.
While Pick n Pay will no longer compete in Nigeria, it still has physical presences in Botswana, Eswatini, Lesotho, Namibia, Zambia, and Zimbabwe.
