Nigeria retail sales dropped by 16 percent this year to 105 billion from 125 billion recorded in 2016 according to US management consulting firm, AT Kearney’s 2017 Global Retail Development Index (GRDI) report.
Retailers have long been attracted to the sheer size of the Nigeria market however the report said Nigeria is now behind Morroco, Kenya Tanzania and South Africa on retail investment destination in Africa.
Nigeria inflation which a yardstick to measure consumer spending power has been decreasing since however second quarter however, the food index has been increasing.
In the report, Nigeria dropped down to 27th from 19th position last year out of the 30 developing countries surveyed largely due to the significant drop in Nigerians GDP per capita purchasing power parity, from 6,185 in 2016 to 5,930 in 2017.
However, the report says Nigeria remains an attractive destination for e-commerce companies, with online retail expected to grow at a double-digit rate through 2020.
The report further noted that sub-Saharan Africa region’s massive potential was unmistakable, and reflected in the six Sub-Saharan African countries ranked in the GRDI.
The report is however, optimistic that the tide is set to turn.
“There is ample room for growth, but Nigeria must surmount serious challenges including security threats, and corruption, which have overshadowed its rapid growth,” it noted.
“the increasing importance of e-commerce, hampered by limited logistics and payments infrastructure, however new entrants are attracted to the growing market knowing these barriers will be overcome over time.”
Earlier Kunle Hamzat, secretary of the Retail Council of Nigeria, had told Businessday during Home Décor and Giftware Exhibition that Nigeria economy is desperately in need for foreign investors.
He challenged the retailers to be interested in the consumer welfare. And begin to think outside the box to spur growth.