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| President, Bervidson Retail Group, Jospeh Ebata |
The President/ Chief
Executive Officer of Bervidson Retail Group, convener of ‘The Retail Leaders
Conference,’ Mr. Joseph Ebata in this exclusive interview with OLUWAGBENGA
BANKOLE speaks on the contribution of retail industry to Nigeria’s economy,
challenges of the industry, how government can transforms the industry, the 4th
Retail Leaders Conference and many more. Excerpt!
As a veteran in the
retail segment of the economy, how would you assess the retail industry in
Nigeria?
Nigeria is a retailer’s delight. The Retail industry in Nigeria is evolving
(as in most emerging economies) into the key driver and enabler of Growth.
Modern trade has remerged and grown by 12.5 CAGR over the last 15 years up to
2014. The industry is transforming and many factors are fuelling this. The
factors are the growth in middle class, development in urban centres, the
coming of international, the development of malls, government policies
particularly cashless policy and ban on street trading. Others are
modernisation of open markets to ultra-modern markets, and introduction of
international best practice retail industry specific training which we
pioneered in the country
What has being the greatest problem of the industry?
The greatest problem of the industry has been regulatory and
trading barriers, under development in infrastructure, limited access to retail
real estate, limited shopper/consumer insights, limited talent pipeline,
shortage of adequately skilled manpower, inadequate access to finance, cash
flow and liquidity challenges and poor business structure. Other challenges are
poor adherence to international best practices, supply chain and logistic
challenges, low and unexploited synergy between retail and made in Nigeria
goods.
Looking at the
current state of the economy in Nigeria, how has it affected the retail
industry?
Retail has been the worst hit by the current tightness in
the financial industry and the high exchange rate. For most retailers it’s been
a battle of survival with many retailers taking drastic measures to ensure
their survival such as cutting cost – labour, reducing store footprint,
limiting product SKUs, and tightening up supply chains. Some simply adopted a
wait and see attitude and many have closed down. It has been a challenging and
tough time for retail businesses.
Do you think the
retail industry in Nigeria is getting enough support from Banks?
The temptation would be to say no…
As a former Banker, I would say that both retailers and
Bankers should engage each other more.
Bankers must develop a new mind-set borne out of a thorough
understanding of the issues, challenges and opportunities in retail. They must
understand the KPIs critical to retail success, how to measure and use in loan
assessment. They must be willing to invest in capacity building for retailers
that will in turn enhance the ability of retailers to conduct success business operation
based on best practices. The bank that is willing to make this investment will
ultimately become the bride of the retail industry.
Retailers on the other hand must engage banks with well
thought through demand. They must be willing to invest in themselves and
employees to understand what banks are looking for to become comfortable when
supporting the retailer. The lip service of being a retail bank must give way
to reality.
How can the present administration transform the retail industry in Nigeria
and what policies do you think they should put in place?
We should have a vision and a strategy that is retail
centric. There is a need for policy that would unlock funding for the retail
industry. For instance we have so much locked up in pension funds of about N5
trillion. How can we make it accessible to retail?
Government needs to formulate some policies in order for
retail segment in Nigeria to fulfill its potentials. Policy that will include
retail business studies in our tertiary institution’s curriculum, policy that
will improve clearing of goods from the ports, policies that will eradicate
multiple taxation, policy on land use reforms to make real estate more
accessible to retailers, policies on ease of doing business in Nigeria for
foreign investors and policies that will support retail to promote the buy
made-in-Nigeria goods
We are grateful to our participants at 2016 and other
editions for their valuable feedback that have largely influenced what have
gone into the making of this year’s edition. From the choice of theme, to
topics and speakers…. All bears their imprint
2017 Retail Leaders
Conference is around the corner, what should the world be expecting?
We expect this year’s edition to build on the successes of
past editions. Our focus is on
galvanising support for the retail industry from all stakeholders, particularly
the government. This year’s conference
comes against the backdrop of the current national economic challenge. With the
government actively trying to reposition the economy, this Conference will show
retail as the key sector that is set to become a key driver of our national
economic growth.
The potential of retail is huge… from contribution to GDP,
to employment
When everything boils down to the basics, the volume and
momentum of trade is the engine of economic growth. At the core of trade, and
as the ultimate point of value exchange is retail.
Globally, Retails plays a dual role as a key driver and as a
catalyst of world economic growth. As a driver, it contributes $19 trillion to
global GDP, representing 27% of global output and employs more than 17% of the
global workforce. As a catalyst, it is the point where supply meets demand, and
it is how goods and service reach the final point of exchange.
As Nigeria actively drives the diversification of the
economy, Retail is driving urban regeneration with ultra- modern international
mall springing forth in all Key Cities of Nigeria. With leisure and social
opportunities, the Nigerian Retail landscape is evolving to provide lifestyle
options that drives economic velocity and leads to urban transformation
Retail contributes 16-18% of Nigeria’s GDP with a size of
$38.8 Billion in 2010 and the 3rd leading contributor to GDP (after
Agriculture, Forestry and Fishing, and Mining and Quarrying). It attracted investment of N205.4bn ($1.3bn)
between 2014 and 2015, growing at a CAGR of 14% and it contributes about 7% to
national employment in Nigeria. When compared with retail’s contribution to
Global employment of more than 17%, it clearly shows the huge potential of
retail to support government’s effort in solving the county’s unemployment
challenge in the country.
According to the 2016 AT Kearney Global Retail Development
Index, despite country’s economic recession, Nigeria Retail sector ranked 19th
in the world and 3rd in Africa out of the 30 top developing countries for
retail investment in the world, based on all relevant macroeconomic and
retail-specific variable, grossing a total national sale of N38tn ($125bn) in
2016.
However, Retail is dealing many challenges; from dearth of
talents, high cost of real estate, institutional and policy issues, government
regulations, multiple taxation, inadequate access to finance…..
More recently, retail is worse hit by the tightness in the
financial industry and foreign exchange challenges…. If the industry must survive
and thrive to play the role of a key driver of national economic growth – GDP,
Employment, the current arrangement must change.
This Conference will draw the attention of stakeholders to
these issues, address them and adopt solution to set retail on the journey to
fulfilling its potentials.
What advice would you give to young people who
are aspiring to be retailers in the future?
Retail is a noble profession. See it as such. It is not for
those who couldn’t find a paid job. Given the breadth of a retail business,
strategic clarity is very important. Why
are you going into a retail business?
What strategy should you adopt? What is your USP? Think customer… Think
value for customer…. Serve the customer. Your success lies in thinking about
your business today and the future of your retail business through the lens of
the customer. This is your sure route to success.
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