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Wholesale and Retail of Food in Nigeria
Expectations of long-term economic and population growth in Nigeria 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. Lack of infrastructure and import regulations complicate the supply chains of larger players while Nigeria’s poor economic conditions in recent years have affected their performance.
Small Formalised Sector
The sale of food in Nigeria is dominated by the informal sector in open-air markets, and sales through retail chains and supermarkets account for a minor percentage of the overall market. While this has sparked interest from major retailers, the recession in 2016 and low oil prices saw investment interest decline. Nigeria remains a key retail opportunity due to its large consumer base and growing demand for modern outlets.
Food manufacturers and wholesalers have fared slightly better than retailers in recent years. The Nigerian government has instituted a number of policies to support local farmers and manufacturers in an attempt to diversify the economy and reduce Nigeria’s reliance on food imports and oil exports. Support includes tax cuts and low-interest loans to local food manufacturers and import restrictions.
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.