Thursday, December 29, 2005

War of the Megastores

Well, one megastore and two medium-sized stores anyway. Two weeks ago, saw the opening of Nigeria's much-anticipated, first 'Western-style' shopping mall, The Palms. Anyone who regularly drives on the Lekki-Epe Expressway would have seen the building in various stages of completion over the past months. For now, only a handful of stores have actually opened-up to the public - among them are Shoprite (a huge supermarket akin to Stop and Shop in the U.S, or Tesco in the U.K) and Game (reportedly, since I'm yet to go there, a we-stock-everything Walmart type of store). When finally completed, the mall will also house a cinema as well as a multitude of boutiques and apparently just one bookstore (The developers sized-up the shopping priorities of Nigerians tragically accurately).

The Palms Shopping MallWide view of The Palms Shopping Mall (Will try and get a better photo if I can)

Okay, great, so we have our first real mall. Yay for us! Now on to the interesting part. Around the same time The Palms opened, two hugely popular supermarkets on the island, Park 'n' Shop and Goodies both closed down. We all wondered why - until the rumour mill had it that the Customs authorities had shut-down both stores for smuggling in goods. Now, until the arrival of Shoprite, Park 'n' Shop and Goodies were two of the biggest supermarkets on Lagos island, and so if they had been involved in any illegal activity, it would not have been difficult to find this out. The fact that the timing of this 'discovery' has turned out to be so fortuitous for Shoprite, given that its major competitors were closed-down in the busiest shopping week of the year, has of-course led to many speculations that the tip-off came from Shoprite.

Close up of Mall with Shoprite in Foreview
Close-up of The Palms Shopping Mall with Shoprite in the Foreview

If this is true, I think it's a really sad commentary on the way business is done today. As a consumer I obviously welcome competition because it benefits me. I believe that companies should too, because competition forces them to provide goods and services more efficiently. I also believe that over time companies tend to find their niche market, be this dictated by locality; or by range, price and/or quality of goods and services provided. While I recognise that, for instance, retail behemoths can afford to slash their prices to a level that smaller, family-owned businesses might not be able to, these smaller businesses might more than compensate for this by the quality of personal attention they provide to their customers or specialised range of goods they offer. My point is that each type and size of business can find its own market without needing to stomp out all competitors. But then, maybe I'm just being naive about the hard, cold realities that companies, in this age of big business and globalisation, face.

Links:
http://allafrica.com/stories/200512160143.html
http://www.yemma.com.ng/shoprite-opens-at-the-palms/
http://www.shoprite.co.za/default.asp?pageID=84949060

9 comments:

Emmanuel said...

Ore, nice work you have done on this piece. I was actually at Shoprite to pick some electronics on 03 January 2005. The place is really huge. Anyway, I hope the company will be able to sustain the tempo they start with.

Ore said...

Thanks, Emmanuel! Hope they keep it up too. I'm sure that they will because it's a for-profit venture and it seems to me that Nigerian companies are increasingly realising that it's not just about how you start, but also how you continue.

Anonymous said...

i think shoprite is a load of shit. park 'n' shop is soo much better. especially the one in lagos, nigeria. EVERYONE GO THERE. p.s ore, this article was well written

Ore said...

Thank you kindly, anon!

I like Shoprite. Many things are expensive there, but it's also very convenient.

ade_1 said...

so unfortunate that the other stores closed down.I suspect a conspiracy here. The owners of the new megastore just seem to not want to have a competitor in that area. A lot of people bring contraband into the country,especialy the wives of the big guns. so why shut the other store. Nigeria still has a long way to go when it comes to development.

Omar Kaj said...

True, but when I was in Lebanon, I saw a lot more stores than The Palms, for e.g., ABC, City Mall (a large-scale version of The Palms), Verdun Mall, etc. The mall's not so amazing, but it's a start... unlike the Silverbird Galleria, which has too little interesting stores, bad floor-quantity planning, and no efficient parking spaces. The Palms isn't a bad idea, but it's too bad that other stores are closing down due to such factors. All they need is to re-study their business moduel and start all over, but even better.

P.S. Why didn't you register to get advertisements on your blog from Google Adsense? If you earn the minimum of $100 by the 15th of every month, you'll get paid. (You just need people to see your ads on top of your blog and open the advertised hyperlinks being generated.)

Ore said...

Hi Omar,
Well, those stores that were closed are open now and business seems to be booming for all the stores and malls. Every business will have its target audience and although Silverbird seemed a lot emptire in the wake of The Palms' opening, it seemed to have regained many of those customers.

I didn't register for Adsense, because I wasn't sure about whether it would be considered as US-generated income that I'd have to file a tax return for.

aadekanmbi@gmail.com said...

Ore -

Excellent blog wonder how you are adjusting to moving back home - I intend to visit this fall and check things out for myself, being about 7 years since I visited. Check out Chris Abani's book Graceland - truly a gem to read.

Yomi

Ore said...

Thank you for the kind words, Yomi! Hope you like what you see when you visit.