Report Coverage
This report focuses on the wholesale and retail of food in Nigeria and includes information on the size and state of the sector and the infrastructure, demand and conditions that support it. This includes the state of online retail and development of shopping malls. There are profiles of 16 companies that include major retailer Shoprite, suppliers such as Nestlé and Unilever and Nigerian players such as food manufacturer United Africa Company of Nigeria (UAC) and independent grocery chain Addide.
Introduction
This report focuses on the wholesale and retail of food in Nigeria. Nigeria is Africa’s largest economy and its most populous country and has a retail sector worth over US$100bn. Expectations of long-term economic and population growth have driven substantial interest from retail investors looking to secure a first-mover advantage in servicing the demand of a potentially huge consumer class. Formal supermarkets are growing from a very low base as the vast majority of food is still traded in the informal market. Nigeria has a significant infrastructure deficit and maintains a number of import regulations that complicate the supply chains of larger players. Since recovering from a recession in 2016, relatively slow economic growth has continued to put pressure on consumer spending.
Strengths
• A number of multinational market leaders are already present, with many more operating in the region.
• Food retail has upstream and downstream linkages to a number of sectors supported by government.
• Formal market concentration is very low, attracting investment from retailers and real estate players who wish to secure an early advantage.
• Nigeria is considered an investment hub for companies looking to expand into West Africa.
• Very large population and growing middle-class present food retailers with an attractive consumer base.
• While agro-processing is underdeveloped, Nigerian agriculture has the potential to supply a wide variety of food products.
Weaknesses
• High levels of informality complicate supply chains, requiring players to partner with local companies or develop entirely new networks.
• Nigeria is a net food importer and foreign retailers are reliant on imports to carry their full product range.
• Oil-dependent economy vulnerable to commodity price shocks.
• Poor trade and energy infrastructure significantly complicate supply and distribution, and can increase costs.
• Security concerns, including high levels of crime and terrorism.
• Shortage of skills.
• Strict import and foreign exchange regulations.
• Weak and corrupt institutions.
Opportunities
• Convenience and value-added services attracting consumers to formal supermarkets.
• Government support and increasing investment in agriculture and food manufacturing.
• Growing device and internet penetration and an increasingly youthful population driving the uptake of e-commerce.
• Increasingly dynamic middle-class driving demand in the formal channel.
• Ongoing investment in infrastructure.
• Ongoing investment in shopping malls.
• Potential for trade liberalisation and greater market access through continental free trade agreements.
• Technology enabling innovations in retail supply chains and consumer demand analysis.
Threats
• Consumer spending may be slow to shift to formal sector as Nigerians continue to primarily use informal markets.
• Continuing slow economic growth, rising unemployment, and double-digit inflation may keep consumer spending under pressure.
• Government expenditure assumes relatively stable international oil prices.
• Increase in security threats.
• Minimum wage and value added tax hikes may increase supermarket costs.
• Threats of more stringent foreign exchange and import controls undermining retailer confidence.
Outlook
The food retail industry is still feeling the effects of Nigeria’s recession, even as the wider economy slowly recovers. Despite GDP growth, consumer spending has remained under pressure due to rising unemployment, high inflation, and little real income growth. Shoprite has reined in its capital expenditure and expansion plans, citing the slow economy and supply challenges attributed to poor infrastructure and stringent foreign exchange and import regulation. While Spar and many local grocery chains are still expanding, the growth of retail outlets has slowed compared to the pre-recession period, and consumers have been relatively slow to shift their spending towards formal channels. The development of retail real estate is ongoing, but has also slowed, and the majority of new malls are below 10,000m2, targeting local businesses as tenants and servicing only basic consumer demand. While the online retail market continues to grow, confidence in the short-term viability of e-commerce has been shaken by widening losses and a number of divestitures. Nevertheless, supermarkets, food manufacturers, and real estate investors remain committed to the Nigerian market, highlighting the fundamental long-term opportunity of such a huge and potentially dynamic consumer class. Broll Nigeria states that 2019 has brought increased interest from a number of foreign companies looking to enter the market through partnerships with local players. South Africa’s Pick n Pay is set to enter Nigeria in the next year and existing retailers have invested in efficient distribution models and innovative marketing and value-added service offerings. Analysts and stakeholders suggest that, while the environment is likely to remain challenging in the short-term, Nigeria’s food retailers are well-positioned to take advantage of an economic upturn and long-term trends.
The Wholesale and Retail of Food Industry in Nigeria
2019
Full Report
R 1 900.00(ZAR) estimated $99.92 (USD)*
Industry Landscape
R 1 330.00(ZAR) estimated $ 69.95 (USD)*
Historical Reports
The Wholesale and Retail of Food Industry in Nigeria 2015-02-19
R 1 900.00(ZAR) estimated $99.92 (USD)*
View Report Add to CartTable of Contents
[ Close ]| PAGE | ||
|---|---|---|
| 1. | INTRODUCTION | 1 |
| 2. | COUNTRY INFORMATION | 1 |
| 3. | DESCRIPTION OF THE INDUSTRY | 2 |
| 3.1. | Industry Value Chain | 4 |
| 3.2. | Geographic Position | 6 |
| 4. | SIZE OF THE INDUSTRY | 7 |
| 5. | STATE OF THE INDUSTRY | 9 |
| 5.1. | Local | 9 |
| 5.1.1. | Corporate Actions | 20 |
| 5.1.2. | Regulations | 22 |
| 5.1.3. | Enterprise Development and Social Economic Development | 26 |
| 5.2. | Continental | 27 |
| 5.3. | International | 32 |
| 6. | INFLUENCING FACTORS | 34 |
| 6.1. | Economic Environment | 34 |
| 6.2. | Shopping Malls | 35 |
| 6.3. | Poor Infrastructure | 37 |
| 6.4. | Labour | 39 |
| 6.5. | Environmental Concerns | 40 |
| 6.6. | Terrorism and Security | 42 |
| 6.7. | Technology, Research and Development (R&D) and Innovation | 42 |
| 7. | COMPETITION | 44 |
| 7.1. | Barriers to Entry | 46 |
| 8. | SWOT ANALYSIS | 46 |
| 9. | OUTLOOK | 48 |
| 10. | INDUSTRY ASSOCIATIONS | 48 |
| 11. | REFERENCES | 49 |
| 11.1. | Publications | 49 |
| 11.2. | Websites | 49 |
| APPENDIX 1 | 51 | |
| Summary of Notable Players | 51 | |
| COMPANY PROFILES | 53 | |
| ADDIDE LTD | 53 | |
| ARTEE INDUSTRIES LTD | 56 | |
| DRINKS AND FOOD WAREHOUSE INTERNATIONAL LTD | 58 | |
| EKULO INTERNATIONAL LTD | 59 | |
| FOODCO NIGERIA LTD | 61 | |
| LEVENTIS FOODS LTD | 64 | |
| MASSMART HOLDINGS LTD | 66 | |
| MULTI-PRO ENTERPRISE LTD | 72 | |
| NESTLE NIGERIA PLC | 74 | |
| PAYMENTE LTD | 77 | |
| PROMASIDOR NIGERIA LTD | 79 | |
| PZ CUSSONS NIGERIA PLC | 81 | |
| SHOPRITE HOLDINGS LTD | 84 | |
| UAC FOODS LTD | 89 | |
| UNILEVER NIGERIA PLC | 91 | |
| WIGMORE TRADING LTD | 94 |
