Retailers question dollar rents in Nigerian malls

Retailers who operate in dollar-denominated malls across the country are questioning the development following the free fall of the naira in recent times.

Prior to the announcement of a market-driven foreign exchange policy by the Central Bank of Nigeria, developers of retail malls determined their rents in United States’ dollars though payable on due dates in naira; but tenants are increasingly becoming apprehensive as the naira continues its free fall against the greenback.

At a recent forum for retailers in the country tagged: ‘The Retail Leaders Conference’, with the theme, ‘Unlocking retail potential for survival, growth and sustainability’, some stakeholders noted that the calculation of the rent in dollars had become a challenge for them due to the current economic realities.

The Founder and Chief Executive Officer of Ruff ‘n’ Tumble, Mrs. Adenike Ogunlesi, stated that retailers needed to have meaningful collaboration on the issue and others affecting their businesses.

She said, “What do we do about the dollar-denominated sale of floor spaces in malls when our sales are all in naira? What do we do about 20 per cent occupancy in malls where we are paying full rates, whereby the stores that are meant to do collective footfall are not opened?

“Advocacy begins with sincerity of purpose from all parties involved and the willingness to work together so that we can all win. We need to have meaningful collaboration.”

The Founder and Chief Executive Officer, Healthplus and CasaBella, Mrs. Bukky George, said the economic situation in the country had taken its toll on the retail business.

George said landlords and mall developers should engage tenants to identify ways of surviving the current season.

“Landlords and developers should consider concessions in order to encourage retailers,” she noted.

According to her, sales have reduced in most malls, while closure of stores has accelerated and opening of new ones has slowed considerably.

“Some malls are completed but have remained unopened and many opened malls are dotted with empty stores, leading to poor sales for the opened stores,” she stated.

Among other challenges facing the retail industry, George said there was a big gap in retail expertise and poor support for retail enterprise resource planning.

She added that retailers should consider conducting researches on consumers’ needs so as to cushion the negative effects of the present economic climate.

Ogunlesi also urged retailers to think creatively, adding, “Where we are currently is not the best for retail but there are many opportunities in the retail value chain, we only have to think differently.”

Other speakers at the conference, including the Chief Executive Officer of Nextnomics, Mr. Temitope Oshikoya; Chairman, First Bank of Nigeria Limited, Mrs. Ibukun Awosika; and Co-founder of Jumia, Mr. Raphael Afaedor, highlighted the economic uncertainties in the country and suggested ways that retailers could survive the challenges.

The Chief Executive Officer, Bervidson Group, conveners of the conference, Mr. Joseph Ebata, stated that businesses, particularly those in the retail segment, were facing a wide range of challenges, which were threatening their existence.

“The good news is that retail in Nigeria is one that is full of great opportunities. So, while retail is dealing with many challenges, it must not lose sight of the potential and opportunities that can be tapped and leveraged on for survival, growth and sustainability,” he said.