In 2013, a prescient McKinsey report forecasted a $40 billion surge in Nigeria’s food and consumer goods sector, painting a picture of prosperity for all stakeholders involved. Anchored on factors like rising Gross Domestic Products (GDP), a growing middle class, increased female employment, and rapid urbanization, the stage was set for significant growth in the formal retail sub-sector.

However, the trajectory took an unexpected turn. The unforeseen global economic downturn and the relentless grip of the COVID-19 pandemic triggered not one, but two recessions within six years, sending shockwaves through the economy. Major players in the formal retail arena, including Africa’s biggest supermarket chain, Shoprite, faced such dire circumstances that they opted to offload their Nigerian businesses to local investors. Even international retailers such as Mr. Price, WoolWorth, and Mass Market (owners of the Game brand) had to shut down operations in the country.

Amidst these challenges, there now lies a glimmer of hope on the horizon. Euromonitor, a London-based research firm, revealed that Nigeria’s consumer goods segment registered a remarkable 9.3 percent growth, reaching a six-year high of N9.76 trillion in 2021. Brick-and-mortar retail accounted for the lion’s share at N9.58 trillion, with online trading contributing N178.2 billion. The 2021 Global Retail Development Index reinforced this optimism, reporting a three percent surge in retail sales valued at $108 million. On the home front, the National Bureau of Statistics (NBS) reported an 8.62 percent increase in trade for 2021, a welcome rebound from a prolonged slump.

Moving into 2022, the momentum seems unbroken. Supermarkets, against all odds, demonstrated strong performance despite unfavorable economic conditions and surging inflation. Business Wire reported a double-digit growth in current value, although constant value sales declined, and new store openings remained limited due to ongoing inflation pressures.

The spotlight now turns to the driving forces behind this resurgence. Ade Sun-Basorun, CEO of FoodCo Nigeria, a leading omnichannel retailer, attributed it to two key factors: the burgeoning demand for modern retail and the adaptability of sector operators. Sun-Basorun noted, “The consumer class is increasingly sophisticated in their demand for retail services, despite economic pressures. They are placing trust in modern retail to deliver the aspirational lifestyle they desire. Beyond pricing, convenience, quality assurance, and product availability play pivotal roles in sustaining the sector.”

Acknowledging the operators’ contributions, Sun-Basorun emphasized how the COVID-19 pandemic compelled the market to either innovate or perish. This challenge motivated operators to seek cost-effective strategies and expedite digital transformation to optimize scarce resources. The pandemic hastened FoodCo’s digitization plans, leading to successful outcomes.

FoodCo itself embodies the resilience of Nigeria’s modern retail landscape. Established four decades ago as a small fresh produce store, the company has grown into a pioneer of formal retail and quick-service restaurants in Nigeria. Even during the pandemic, FoodCo ambitiously expanded, gaining recognition as one of Africa’s fastest-growing companies by the Financial Times.

Beyond FoodCo, a new wave of indigenous regional players—Roban Stores, EveryDay, Market Square, San Husseini, and Addide—have emerged, reshaping Nigeria’s formal retail narrative, which was once dominated by foreign brands.

Sun-Basorun anticipates even brighter days for Nigeria’s formal retail ecosystem, buoyed by a sizable consumer class and the nation’s pivotal role in Africa’s consumption growth. While other sectors struggle with the aftermath of economic downturns, the success story of the organized retail sector stands as a beacon, guiding the way forward through challenging times.