Is Nigeria’s retail industry growing or shrinking?

Nigeria's retail industry is currently at a crossroads, facing both challenges and opportunities as the economy begins to show signs of improvement. In an exclusive interview with Haresh Kishwani, Managing Director of the Arte Group, CNBC Africa delved into the state of retail in Nigeria. Kishwani highlighted that while there may be some growth in terms of value, the regional retail sector is experiencing a decline in volumes. The devaluation of the Naira has had a significant impact on the industry, with the fluctuating exchange rate affecting the cost of imports and overall business operations. One of the key factors affecting the growth of the retail sector is the lack of new stores being opened and the challenges in the supply chain. Kishwani emphasized the importance of factors like real estate development, human capital development, and a stable supply chain for the growth of retail in Nigeria. However, existing shopping malls are facing difficulties in collecting rents from tenants, leading to a reluctance in investing in new retail spaces. These challenges have had a direct impact on the growth of the sector. In response to the question of whether going online or sticking to brick-and-mortar stores is a better strategy, Kishwani stressed the limitations of online retail in Nigeria. High return rates and the practice of paying on delivery have made online retail less profitable, making brick-and-mortar stores a more viable option for retailers. He highlighted the importance of the experience that brick-and-mortar stores offer, which aligns with the aspirations of Nigerian consumers. When discussing the government's understanding of the importance of retail in economic recovery, Kishwani acknowledged the government's focus on supporting manufacturing and agriculture. While these sectors are crucial for economic growth, he emphasized the need for a strong retail platform to connect manufacturers with consumers. Without a robust retail sector, the efforts to promote local manufacturing and agriculture may face challenges in reaching the end consumer effectively. Overall, Nigeria's retail industry is facing a complex set of challenges that require a strategic approach from both industry players and policymakers. While there are opportunities for growth, addressing issues such as supply chain disruptions, real estate development, and the shift towards e-commerce will be crucial for the sector's recovery and sustained success in the long run.