The country also ranked 19th out of the 30 top developing countries for retail investment, based on all relevant macroeconomic and retail-specific variable.
According to the report, Nigeria’s retail development is supported by a middle class that has grown by 600 per cent in the last few years and now includes 4.1 million households, or 11 per cent of the country’s total population.
It added that retail in developing countries had seen excellent growth, and while the developing world population had grown by 21 per cent to 6.2 billion, retail sales in those markets had increased more than 350 per cent and represented more than a half of the total global retail sales.
“Despite the economic growth being tempered by low oil prices, constrained government expenditure and consumer spending, which took a hit in 2015, plummeting nine per cent as inflation made consumers more careful with their shopping, Nigeria still offers global retailers many opportunities,” the report said.
It added, “Modern trade is still underdeveloped, and aside from incumbent Shoprite and SPAR, few international grocers have entered and none has a real national presence. Nigeria poses some tough challenges to navigate, including import regulations, high rental costs, and power shortages—and there still isn’t an authoritative map of Lagos, let alone other major metropolitan areas. South Africa-based fashion retailer Truworths, closed its two remaining Nigerian stores due to this environment.
“Still, other retailers are placing their bets. Spanish discounter DIA plans to open more than 100 stores by 2020, and South Africa’s Pepkor plans to double its presence by 2018. Mall developments in Lagos and Abuja are also spurring growth. South Africa’s Resilient Group has four mall developments planned for completion between 2016 and 2017.”
The report noted that sub-Saharan Africa region’s massive potential was unmistakable, and reflected in the six Sub-Saharan African countries ranked in the GRDI.
Exciting opportunities keep opening up as household incomes rise, countries become urbanised, and the rising middle class embraces organised retail and demands more and better services. However, informal trade still dominates and expanding into the region remains far from easy,” it stated.
The Chairman, Nigerian Institution of Estate Surveyors and Valuers, Lagos branch, Offiong Ukpong, said that the country had all the economic indices to boost retail development despite the economic downturn.
He said, Nigeria’s economy remained the biggest in Africa and prior to this government, Nigeria was targeted to be among the 15 developing countries by 2030.
He said, “All indices in terms of development show that there are chances of increase in activities.
“The retail market is doing well and while the government may not have money at the moment, there are individuals who are growing the economy. Nigerians also travel far and if there is no money in the country, those who travel still find a way to bring in money into the country.”
Ukpong however said that the recession had taken a huge toll on the real estate sector.
“There is a problem of getting people to pay for accommodation and take up new accommodation,” he added.Read More Industry News