21 September, 2020
Shoprite (SHP) - Selling the family silver
Despite the challenges in Nigeria, as the second-largest economy in Africa, we think it should have remained part of SHP's long-term strategy. Our detailed analysis shows that SHP Nigeria was surprisingly profitable in local currency. Despite restrictions on trade, SHP Nigeria generated a higher net margin percentage than the rest of the SHP Group. The resolve of SHP to leave a key market such as Nigeria raises the question if a similar outcome could occur in Angola. In SA, SHP hit a sweet spot with its innovations all firing at the right time. Checkers was well-positioned to benefit from the lockdown, with consumers compelled to dine at home. However, this element of growth could fade as the lockdown restrictions ease.