‘Foreign capital, middle class drive retail industry’s growth’
Nigeria’s retail industry has experienced significant activity over the past decade, with formal retail space growing from 30,000sqm to over 300,000sqm across different geographical locations over the same period, owing to foreign capital and growth of middle class, an expert has said.
Research Director, Davenport and Islington, Ladi Abudu, who made this observation in Lagos recently, said that a huge amount of foreign capital fueled mainly by private equity investors have been behind most of the mall developments in Nigeria and over the years.
Abudu, who said that many international retail brands including the likes of Hugo Boss, Lacoste, Pandora, Hamley’s, as well as local retailers such as Da Viva, Office everything, Ruff n Tumble, have extended their footprint to the Nigerian retail sector, added that retailers in the fast moving consumer goods sector have also a notable presence in Nigeria with many malls being anchored by the likes of Shoprite, Game and Spar.
The large, young and growing population as well as its aspiring middle class, he said, has informed the attractiveness of the Nigerian retail industry to both retailers and investors alike. “That formal retail only accounts for roughly five per cent (Oxford Business Group) of the retail market speaks to the enormous potential that exists in the industry for different players across the value chain of the industry”, he added.
However, the growth of the formal retail sector has been driven by the increased awareness of multiple benefits that shopping malls offer to retailers and consumers alike, Abudu said, noting that convenience, variety, and in some cases lower prices, given the agglomeration of retailers have all acted as the key drivers of footfall in a retail scheme.
“Availability of relatively better quality products, an improved supply chain, a one-stop shop for varied choices of brands and products, are some of the benefits that accrue to the consumer. “Retailers within the organised setting are also considered more efficient and able to cater to the diversified nature of consumer demands besides the creation of employment for many in logistics, store management, sales and quality assurance.
“In addition to retail shops, shopping malls with a good range of amenities including, cinemas, good food and beverage offering, as well as recreational facilities and banking services attract significantly more shoppers than a standalone store”, he added.