South African grocery retailer Pick n Pay has announced its exit from the Nigerian market by selling its 51% stake in a joint venture, as CEO Sean Summers revealed on Monday. The decision comes less than five years after the company entered Nigeria through a partnership with A.G. Leventis, operating two stores, including a flagship outlet in the upscale Victoria Island area of Lagos.
This exit reflects a broader trend of multinational companies withdrawing from Nigeria, which has become increasingly challenging for businesses due to profitability issues. Pick n Pay reported a considerable half-year loss, with a pre-tax deficit of 1.1 billion rand ($62 million) for the 26 weeks ending August 25, up from a loss of 837.2 million rand the previous year. The retailer faced rising trading losses, particularly in its core supermarket operations, attributed to declining profit margins.
Despite these challenges, Pick n Pay has noted positive developments in its clothing and online segments, as well as improvements in the performance of its company-owned supermarkets. CEO Sean Summers expressed cautious optimism about the company’s ability to reduce trading losses by up to 50% for the full year.
Meanwhile, the group’s discount brand, Boxer, has seen a 16% rise in trading profit, with sales increasing by 12%. Pick n Pay plans to list its Boxer business on the Johannesburg Stock Exchange by year-end, aiming to raise up to 8 billion rand ($452 million), potentially marking it as the largest offering on the continent this year.