Entrepreneurship Zone: 26 August 2025: Why this private equity firm backed Nigerian retail chain Justrite

Tue Aug 26 15:24:26 CAT 2025

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Entrepreneurship Zone: 26 August  2025: Why this private equity firm backed Nigerian retail chain Justrite

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Justrite has a total of 17 stores.

Justrite, a Nigerian retail chain with 17 stores, focuses on ‘underserved’ locations that other supermarket players have deemed unfeasible. Now, private equity firm AfricInvest has made an investment in the company. In this interview, Abiola Ojo-Osagie, a senior partner at AfricInvest, shares insights into the firm’s decision to invest in Justrite and the trends shaping Nigeria’s retail landscape.

Can you give us some background on Justrite. How large is the business compared to other supermarket chains in Nigeria?

Justrite was founded 22 years ago by Dr Ayodele Aderinwale, Mrs Oluwatosin Aderinwale and Mrs Omoboye Fejeku, and has remained a family-owned business ever since.

They are now one of the largest supermarket chains in Nigeria, operating 17 stores across Lagos, Ogun and Osun states [all in South West Nigeria].

What do Justrite’s stores look like, and how do they differ from other competitors?

There are four main categories of grocery retail outlets in Nigeria: traditional open markets, small neighbourhood stores, multibranch franchises and megamarts.

Justrite currently has three shop sizes – there are mini-stores (less than 1,000m2), midi-stores (1,000 – 1,500m2) and maxi-stores (above 1,500m2). All of these sell a range of items including food, cosmetics, clothing and electronics.

Whereas competitors – for example Spar and Shoprite – try to cater to all customers with a single format, Justrite’s multi-format approach makes them more flexible and allows them to complement smaller neighbourhood stores.

How is the Justrite brand positioned?

One of the things we like about Justrite is their target market. The company is focusing on consumers in ‘underserved’ markets – locations where other supermarket chains did not think it was feasible to open stores, typically densely-populated residential areas such as Ikorodu, Bariga or Abeokuta.

These are neighbourhoods where you will not find some of the large retailers, which tend to be located in business districts such as Victoria Island or Ikoyi. However, just because these areas are underserved, it does not mean they have less buying power. These communities have huge demand and very high footfalls, but they are typically served only by small neighbourhood stores or traditional markets.

What is Justrite’s key value proposition?

Justrite aims to offer lower prices, a wider product range, and better availability than competitors. Price is obviously a major differentiator, but it is not the only factor that influences customers’ buying decisions. Many retailers have incomplete or inconsistent product offerings, which means customers might not find what they want and could take their business elsewhere. It’s extremely important that Justrite maintains product availability of close to 100% to build customer loyalty.

Can you talk a bit about Justrite’s supply chain management strategy?

The business has around 52,000 SKUs (stock keeping units), which are consistent across locations. Since their stores are in areas with very high footfall, Justrite also has a higher product turnover than competitors. These factors mean Justrite can make large and frequent orders, which gives them much more bargaining power with suppliers.

When buying stock, they always go with the most affordable options in each category, and where possible they buy from local suppliers to reduce delivery time and minimise potential supply chain disruptions.

How big are online sales for Justrite?

Currently, online sales are not a big portion of overall sales, but it is one of the areas we are looking to build. Currently customers can order via Whatsapp and pick up from the store, and this works quite well.

As part of the next phase of growth, we are planning to deepen Justrite’s footprint in e-commerce and give customers more delivery options.

What geographical areas are Justrite looking to expand into?

We will concentrate on the South West of Nigeria to start with, and will then expand beyond. There is immense potential not just in the major cities but also in the secondary cities across the country. Whereas other supermarket chains try to cater to all customers with only one format, Justrite’s model of having different store sizes to cater to different populations should make it easier to penetrate some of the ‘second tier’ cities .

Describe the trends you are seeing in the retail space in Nigeria.

The penetration of formal retail in Nigeria is still very low, accounting for maybe just 5% of the overall market. But we are seeing a shift to formal grocery spending, and a deepening of the formal retail sector. The recent moves by the Central Bank of Nigeria [to remove old notes from circulation and help digitise the economy] are causing some disruption but can help speed up the long-term shift to formal retail. In the last few weeks, we have gone from 60% of sales being on card, to around 85%. There will be reluctance to change, but we will adapt. I think we will see an acceleration to digital across all sectors and services.

As for Lagos, it is a rapidly growing city, with about 5,000 more people arriving here every day. This in itself will spur a lot of growth. No matter the economic situation, people will always want to buy the kind of essential goods that Justrite sells.

What are AfricInvest’s potential exit opportunities for this investment?

Beyond the top nine or 10 retailers, there is a lot of fragmentation in the retail market, so there are a lot of opportunities for mergers and acquisitions. Big international retailers are waiting on the sideline to see how local brands evolve in this huge market and this could be an interesting exit possibility for AfricInvest.

-Howwemadeitinafrica

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