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DIA expands in Nigeria

News, 23 October 2015

LAGOS: DIA, the Spanish supermarket brand, is expanding further in West Africa, with its Nigerian operator planning to open more than 100 stores by 2020.

Two outlets have already opened in Lagos and Samuel Abiola-Jacobs chief operating officer at First Master Retailers Ltd, the Nigerian company that owns the local rights to run DIA stores, indicated that more could be added at the rate of 25 a year, Mail & Guardian Africa reported.

Modern retail is not well-developed in the country, with around 95% of shopping purchases made in open-air markets, but Abiola-Jacobs said there was opportunity for retailers to prosper as consumers switched to formal stores.

"When you go into emerging markets and lower income areas, you have a number of people, maybe six or eight, living in one household, so what you need to look at is the combined spending power, rather than the individual spending power," he said.

"When you combine it, you find that there's good purchasing power."

High property costs and poor infrastructure have deterred foreign food retailers from establishing a presence in Nigeria; the Dutch Spar brand and South Africa's Shoprite are among the few sticking the course.

There is an appetite for modern retail, however. Michael Chu'di Ejekam, head of real estate in Nigeria for private equity company Actis, has said that Lagos could accommodate 20 malls – there are currently only two – if the appropriate space was available.

Consulting firm McKinsey has also suggested that foreign brands entering Africa adopt a city-based strategy and cautioned against attempting to build a presence across entire countries.

But Abiola-Jacobs was firmly focused on Nigeria as whole, comparing DIA's presence in neighbouring Senegal where there are now 60 outlets "and they haven't even gone throughout all Senegal, so you can see the potential is massive".

He added: "Given how populated we are here and the growth of consumerism in Nigeria, we're expected to do even better."

Data sourced from Mail & Guardian Africa; additional content by Warc staff