Pick n Pay, a major South African grocery retailer, has announced its decision to exit the Nigerian market by selling its 51% stake in a joint venture with A.G. Leventis (Nigeria). This move marks another significant departure of a foreign brand from Nigeria’s retail sector as businesses struggle to overcome persistent economic and operational challenges in the region.
Having entered Nigeria less than five years ago, Pick n Pay initially sought to capture a share of one of Africa’s largest consumer markets. With two stores, the retailer aimed to meet Nigeria’s growing demand for accessible grocery retail. However, economic volatility, currency instability, and increasing regulatory barriers have hindered the company’s ability to maintain profitability and expand its footprint in Nigeria as originally planned.
“We came into Nigeria with a clear vision to provide convenient neighborhood stores for underserved communities,” said Sean Summers, CEO of Pick n Pay. “However, the market conditions have proven too challenging for us to continue in this space, and we believe refocusing our operations will better serve our strategic goals.”
The decision reflects a broader trend of multinationals pulling back from Nigeria. Over recent years, global brands including Microsoft, Guinness, and GlaxoSmithKline have either scaled down operations, transferred ownership, or sold their stakes due to similar challenges. In June 2024, beverage giant Diageo divested its 58.02% shareholding in Guinness Nigeria to the Tolaram Group, citing difficult economic conditions. Likewise, South African brands such as Shoprite, Woolworths, and Truworths previously attempted to enter the Nigerian market but ultimately exited after struggling to navigate the local business environment.
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Despite its decision to exit, Pick n Pay had initially been optimistic about the Nigerian market. In 2020, David North, Group Executive for Strategy and Corporate Affairs, highlighted Nigeria’s significant potential, noting that the country’s consumer market remained largely underserved. Unlike other South African retailers, Pick n Pay’s strategy centered on smaller, local stores rather than flagship locations, leveraging its partnership with A.G. Leventis to address local regulatory and logistical challenges. However, mounting economic pressures have ultimately proven insurmountable.
The sale of Pick n Pay’s stake will occur in stages, with the company gradually winding down its presence in Nigeria. While the exact financial terms of the deal have not been disclosed, Summers emphasized the strategic need to exit the Nigerian market in favor of strengthening the company’s position elsewhere.
As Pick n Pay and other multinational brands reconsider their investment strategies in Nigeria, the nation’s economic landscape continues to pose significant challenges for foreign retailers seeking long-term growth.
