BACKGROUND OF STUDY

Retail in Nigeria was once confined to traditional open markets and small local storekeepers loosely referred to as the informal retail sector of the Nigerian economy which serviced communities. Between 1960 and the early 1980s, there were standard retail malls which operated chain stores across the country; their number reduced because of the harsh business environment and the decline in business in that era, leaving the country without standard malls for retail business.

This gap led to the growth of the informal or traditional retail market, which traditionally constitutes a formidable part of the retail structure in Nigeria.

Today, Nigeria is experiencing a tremendous shift to a more sophisticated structure as formal or organized retail continues to gain ascendency. The distribution chain and the organization of outlets continue to reflect those of a rapidly evolving economy as standards of living improve and as the population continues to snowball. In the past eight years, Nigeria’s population has grown from 150 million, as established by the population census conducted in 2006, to a country with an estimated population of 171 million people by 2013. In the midst of this, the middle class continues to expand even as 51 percent of the country’s population now lives in cities.

The rise of organized retail has been rapid in Nigeria in the last two decades. NBS data shows that between 2001 and 2004, the wholesale and retail sectors grew by 10 percent per annum. By 2006, its contribution was 16 percent. In the first halves of 2011, 2012, and 2013, it contributed 15.58 percent, 17.05 percent, and 18.44 percent of GDP respectively. The old or traditional retail system which is adjudged to account for almost 90 percent of retail activity in Nigeria has continued to decline because of government’s policy, changes in the composition of Nigeria’s population, rising income level, and increasing sophistication of the Nigerian consumer. In the last decade, the stable political environment, consistently high oil prices, and rise in GDP have had a positive impact on per capita income, which has, in turn, moved more Nigerians into the middle class. Today, more families shop together and organized facilities which meet their need are attracting more shoppers. Therefore, the old or traditional structure of retail continues to give way to the new.