South Africa’s Pick n Pay leaves Nigeria after 4 years

Tuesday, October 29, 2024 – South African grocery giant Pick n Pay (PIKJ.J) has announced plans to exit Nigeria by selling its 51% stake in a joint venture, marking a strategic retreat from the Nigerian market as part of broader restructuring efforts outside its home market.

CEO Sean Summers disclosed on Monday, October 28, that the exit aligns with the company’s recent efforts to streamline its international operations. The decision comes as Pick n Pay faces mounting financial pressures, reporting a substantial half-year loss due to operational and borrowing costs.

Entering Nigeria less than five years ago through a partnership with A.G. Leventis, Pick n Pay currently runs two stores, including one in the prominent Lagos district of Victoria Island. The withdrawal contributes to a growing trend of multinational exits from Nigeria, where profitability remains challenging for many foreign enterprises.

Pick n Pay’s financial report on Monday, October 28, showed a loss before tax and capital items of 1.1 billion rand ($62 million) for the 26-week period ending August 25, a rise from 837.2 million rand in losses from the same period last year. The company attributed a 9.1% increase in trading losses to shrinking profit margins within its core supermarket operations.

Despite the setbacks, Pick n Pay reported "solid momentum" in its online and clothing sectors, as well as improved performance in its company-owned supermarkets. CEO Summers, who is spearheading the turnaround efforts, expressed "quiet confidence" in achieving a 50% reduction in trading losses for the Pick n Pay business by year-end.