Fact-Check: Are ShopRite Owners Selling Nigeria’s Stake as Sales Plunge?

 Fact-Check: Are ShopRite Owners Selling Nigeria’s Stake as Sales Plunge?

On Monday, August 3, 2020, there was a report flying on Social Media that ShopRite, Africas largest food retailer, was planning to exit the Nigerian market after posting continuous decline in sales from its operations. 

CLAIM ONE: ShopRite is planning to exit Nigeria. FINDINGS ON CLAIM ONE:
In a telephone conversation with one of the Branch Managers in Ibadan on Monday, August 3, 2020, it was gathered that there was no such claim presently. The Manager noted that there was no indication of its exit yet.

Also in its publication, Vanguard reported that ShopRite Nigeria had debunked the story making the rounds that it intended to close shop in Nigeria. It noted that the Country’s Director for ChastexConsult, Mr Ini Archibong, who also responded to this reporter in a telephone conversation, said, Shoprite is not leaving Nigeria. We have only just opened to Nigerian investors, whom we have also been talking to just before now. We are not leaving. who leaves over 30 billion dollars investment and close shop? It doesn’t sound right. We only gave this opportunity to Nigerian investors to come in and also help drive our expansion plan in Nigeria. So we are not leaving. I have tried to say this to as many people as I can. There should be no panic at all… there is no truth in that report.

And in the seventh paragraph of the report tagged OPERATION AND VOLUNTARY TRADING UPDATE (52 WEEKS ENDED 28 JUNE 2020), there was not any claim that ShopRite itself was exiting Nigeria, rather, it is a subsidiary of the Company, Retail Supermarkets Nigeria Limited, that may be shared out to Nigerian Investors.

That portion of the claim reads: Nigeria- discontinued operations. Following approaches from various potential investors, and in line with our re-evaluation of the Groups operating model in Nigeria, the Board has decided to initiate a formal process to consider the potential sale of all, or a majority stake, in Retail Supermarkets Nigeria Limited, a subsidiary of ShopRite International Limited. As such, Retail Supermarkets Nigeria Limited may be classified as a discontinued operation when ShopRite reports its results for the year. Any further updates will be provided to the market at the appropriate time.” Hence, this claim is FALSE.

CLAIM TWO: Many of the Social Media News platforms reported that the claim was contained in the Companys Operational and Voluntary Trading update filed at the Johannesburg Stock Exchange (JSE) on Monday morning.

FINDINGS ON CLAIM TWO: The claim on the filed Operational and Voluntary Trading update of the Company released on Monday is TRUE. The Company actually released a four-page Companys detailed report on the said date with the title Operational and Voluntary Trading update (52 Weeks Ended 28 June 2020) giving details on the Trading Environment; Nigeria- discontinued operations; Group segmental sales; Supermarkets RSA; Supermarkets Non-RSA; Furniture; Other Operating segments; COVID-19 costs; Impairment of non-financial assets; Voluntary trading update; impact of the Groups pro forma constant currency disclosures; statement on pro forma financial information and Group annual results release and presentation update.

This report has really caused panic as thousands of Nigerians react on Social Media, expressing worries over the increase in unemployment rate amid this Coronavirus pandemic. Some described the reported planned exit of ShopRite as a negative scorecard which might discourage international investors from Nigeria.

There was also an internal memo signed by a General Manager of the Retailer Supermarkets Nigeria Limited to all its employees which affirmed the claim circulating the social media. Hence, this claim is TRUE.

CLAIM THREE: That the retail giant said it was planning to discontinue its operations in Nigeria due to the effect of the Coronavirus pandemic.

FINDINGS ON CLAIM THREE: There was no part of any statement on the Companys reports that stated that the exit was caused by Coronavirus pandemic. Going through the phone interview of the Country Director for ChastexConsult, Mr Ini Archibong, conducted by Vanguard and the internal memo signed by Mr Carl Erickson, the sharing out of Retail Supermarkets Nigeria Limited is to unlock further potential of the Supermarkets in the foreseeable future and to expand the food retail business in Nigeria. Hence, this claim is FALSE.

The claim circulating that the retail outlet has started a formal process to consider the potential sale of all or a majority of stake in its supermarkets in Nigeria is TRUE but the claim that ShopRite is exiting Nigeria is FALSE. Likewise, the claim that the sharing out of the retail outlet is due to Coronavirus pandemic is FALSE. The retail outlet has only been opened to allow investors in Nigeria to come have a share in the business for expansion.

TINU

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