SPAR, the world’s largest food retailer with approximately 20,000 stores in 35 countries, is opening its first flagship store in Lagos in August to set up a fierce competition with retail leader, Shoprite, which first opened in Nigeria more than five years ago.
BusinessDay learnt that the planned flagship store is will be located in the Lekki-Ajah axis of Nigeria’s commercial capital and is being built under a collaboration with Park n Shop and founded in Nigeria in 1988. Park n Shop is owned by the Artee Group and has become a household name in modern shopping in the country.
Following the opening in Lagos, other SPAR stores will open in Otta, Abuja and Port Harcourt. The Lagos store is already attracting the attention of large manufacturers some of which are voting funds to promote the flagship store and by so doing also hope to expand their market share. The arrival of SPAR, Dutch based giant which was founded in 1932 with global revenues in excess of 27 billion euros, will mark a broadening of the retail industry in Nigeria and further advance the professionalisation of what many in Nigeria erroneously see as merely buying and selling. Analysts and shoppers told BusinessDay weekend the coming of SPAR to Nigeria is a good development for consumers.
“Nigerian consumers will now do strategic buying and not just buying for the sake of it; Nigerians will have more options to make choices from. More so, there will be healthy competition, not only in Lagos, but in Otta, Port-Harcourt and other places. It is good for the consumer”, Bismarck Rewane, a leading economist told BusinessDay.
“The presence of SPAR in Nigeria is good for consumer retail line of business which Shoprite has dominated for so long,” observed Tony Adetoba, a consumer. “It will create a healthy competition between the two brands and will offer consumers choices”, Adetona added. The retail market is projected to grow with additional 200 million customers entering the consumer goods market this year, according to a report by Mckinsey on Africa. The report also predicted a quick recovery in the consumer goods and retail sector. This may have buoyed Shoprite’s expansion plan which is scheduled to open more outlets this year. SPAR is one of the best retail chain outfits in South Africa. Their goods are very cheap like Clicks, another brand in South Africa. Their presence means good business and competition for that segment of the market,” Abiola Ogundimu, an economist, said.
SPAR was originally known as DE SPAR, the Dutch phrase for door and some of its flagship stores are still called Eurospar and Interspar in some countries. Most SPAR stores are to be found in Europe but they are now in countries like South Africa, Botswana, Namibia, Zimbabwe, Swaziland, Zambia, Australia, Mauritius, China, India, Japan and soon Nigeria. Under the take-off plan, a SPAR store may be owned independently by a franchisee or be part of a chain, depending on the model applied in any given country.
BusinessDay has learnt that in the first five years, all SPAR stores will be owned by the company but in the second five years of its existence in Nigeria, it will allow and encourage its staff to branch out to become franchisees and subsequently other interested entrepreneurs will be admitted into the elite club of store owners.
One major transformation in the local market is the shifting position in the attitude of manufacturers who are now increasingly willing to sell directly to large retailers, marking a break from the past when they sold only to their accredited dealers and agents. For dealers in Nigeria, they would now have to reshape their business model to align with the changing business landscape. Despite the onset of the global economic meltdown, SPAR’s business has continued to do well around the world with retail sales area in China alone doubling to 300,000 square metres and the addition of about 100 hpermarkets and supermarkets.
Last year, SPAR’s international managing director, Gordon Campbell, spoke of the allure of Nigeria and hinted at his firm’s entry into the country. According to him, “Nigeria is a large developing market on the west coast of Africa with a population in excess of 150 million. We believe that it offers enormous potential for SPAR.”