Wholesale and Retail of Food in Nigeria 2023

Challenges

Complex import procedures.

High inflation. High levels of corruption at ports and state institutions. High levels of informality complicate supply chains. Lack of a formal credit system particularly for small and medium retailers. Many stores are situated in congested areas with poor accessibility. Multiple tax regime. Poor road and rail infrastructure. Security concerns. Shortages of foreign currency. Threats of cyber-security. Unavailability of serviced land for retail development. Unstable power supply and poor water resources.

Introduction

The food wholesale and retail sectors in Nigeria are highly fragmented and dominated by the informal sector and small enterprises, which account for 95% of transactions. Formal retailing includes international brands and accounts for a small portion of revenue. The number of locally-owned retailers has increased, and investors have shown an appetite to invest in them. Nigeria’s large population, rising middle class and tech-savvy youth offer opportunities for investment and expansion in the sector.

Operators face a myriad of challenges including poor infrastructure, a shortage of serviced land for retail development, unreliable electricity supply, high inflation, a shortage of foreign currency, a volatile local currency and complex import processes.

Opportunities

Convenience shopping services attracting consumers to formal shops.

Data aggregation. Ecommerce and fintech, with fast-growing young population and increased internet penetration rate. Economic recovery, high disposable incomes of middle class driving sales. Economic reforms being implemented by government. High population and rising middle-class. Untapped markets in rural areas.

Outlook

Nigeria faces high inflation, unemployment, and unequitable distribution of income.

Locally-owned medium and small retailers continue to expand in small towns and semi-rural areas. Retailers, food manufacturers, and real estate investors remain committed to the Nigerian market, highlighting the long-term opportunity of a huge consumer base. Despite high profile exists of formal retail operators from Nigeria, there are opportunities including relatively small, localised retail developments geared towards essentials, and ecommerce platforms.

Report Coverage

This report on the wholesale and retail of food in Nigeria includes information on the state of the

industry, both formal and informal, mall development, ecommerce, key trends and issues,

influencing factors and notable players.

There are profiles of 21 companies including multinationals

operating in Nigeria such as Nestlé, Unilever and Cadbury, local supermarket chains such as Addide

and FoodCo, and major distributors such as Wigmore Trading.

Trends

Consumer buying patterns have shifting slightly towards more food items as a percentage of household expenditure. Formal retailers are positioning themselves as preferred destinations. Growing ecommerce sector. Local retailers are focusing on city outskirts and suburbs. Mall development is likely to be focused on small suburban malls.