Sophistication driving consumer necessities

With increasing sophistication in the taste of the Nigerian consumers, especially among the upper and middle class, the big stores are making it big in the country. Consumers are now enjoying convenience that comes with shopping at super stores. The comfortable atmosphere inside the shops and haggle free purchase system that lessens shopping time, say some consumers, although there are also relatively lower price for some items as well as quality assurance such that items can be easily returned if otherwise.

The big shops usually known for groceries are also fast expanding to non-grocery items such as household items, clothing, furniture and home appliances/electronics, gifts items, etc., to expand their share in the country’s retail market, currently dominated by the informal retailers.

A recent finding show that Nigeria has a huge and eye-catching retail food sector due to its population and with a change in demographics and lifestyles there appears to be an increase in consumers choice for varieties which includes convenience, processed and packaged foods thereby supporting Nigeria‘s retail food sector to spread out.

Temilade Adesanya confirms that over time she has discovered that some items cost lower in big super stores than even the small and traditional open markets. For instance, the price of Johnson Baby wipes she buys for N370 in super stores, goes for N450 in smaller shops around her neighbourhood.

“It’s not everything that I buy from the big shops either, only that you find out that the other smaller shops and open market still sell cheaper. I patronise them mostly because of the convenience and fun they provide to shopping experience,” Adesanya says.

For Eryca Jones, she cannot buy items such as children’s toys in the big shops which she alleges are inferior products imported and sold very costly to unsuspecting Nigerian consumers.

“Shopping in the big retail shops is very convenient; I can afford to dash in from the office and pick some items without sweating, unlike when I go to the open markets. But there are things I cannot buy there because they are very expensive and sometimes inferior; I usually make out time on weekends to go to the market where I can get enough variety and at cheaper rates,” she says.

Also, a visit to a newly opened super stores shows that things are really looking up, as there is section for any type of foodstuff you would need at home, ranging from catfish, ugu, bitterleaf, melon, ogbono in different size packs and same for crayfish, dry fish, iru, yam, garri and any other food item you can think of.

People actually go to these big stores or the open markets to purchase items because of their relatively low prices while others prefer them for a quality shopping experience.

“The retail industry in Nigeria has steadily become more organised, largely driven by the efforts of some state governments to ban street trading, revitalise city centres and modernise trading standards. This is, however, unlikely to lead to the complete disappearance of the informal channel. Three trading platforms are expected to co-exist side by side in Nigeria in the five years. These are the traditional open markets or street traders, the semi-formal modernised markets, and finally, the Western-style shopping centres or formal retail outlets. Formal retailing is also expected to continue to increase its share of the entire retailing industry over the forecast period,” according to a report.

Industry analysts have maintained that the existence of the informal retail sector will not be threatened, instead operators would bring in innovations to retain their market share.

They are also seeing a situation where the informal sector will sustain its dominance with the ability to offer lower prices than the big shops who have invested much to achieve international standards.

Modern grocery retailers suffer from high operational costs. The illegality of the operations of the small shops puts modern grocery retailers at a distinct disadvantage. Modern retailers have higher fixed costs; they cannot easily evade taxes because of their visibility and they have to source their supplies from legitimate channels.

They are also hampered by the fact that as they are still few in number, there is not, as yet, a strongly organised local supply chain infrastructure that enables them to benefit from economies of scale.

Anne Agbaje