“I don’t doubt that the rents are high, the land charges are high, the utility bills are high, the marketing cost is high, the import duties are pretty high too but I don’t think it’s an issue of just rental, I think it’s more than that,” Sanaz Etebarian, CEO, DealDey told CNBC Africa
According to Etebarian, the pricing wasn’t right as it was way too high for their brand. The South African retail company that opened three stores in Lagos Nigeria last year March followed by a store in Enugu in October.
Etebarian believes that one of the causes of Woolworths' exit is because Nigeria’s growing middle class are more price conscious than they are brand conscious. The majority of them also have access to the internet so are able to do research online before deciding on whether to purchase an item or not.
“Generally speaking in the Nigerian market their [Woolworths] price was way too high for their brand. I think Nigerians are brand conscious but they are more price conscious especially if we’re talking about the growing middle class,” she added.
“I think Nigerians are brand conscious but I think they are more price conscious. If we are talking about the growing middle class, there are people who are more price conscious than brand,” she said.
With the entry of more international brands coming into the Nigerian market such as Mango, Hugo Boss, Lego which is exciting for the middle to upper income group however for these companies to set themselves apart in Nigeria, Etebarian believes they need to maintain international standards of retail.
“They need to have a modern outlook to allow their customers to experience retail the way it should be and they need to find other channels of distribution for example, e-commerce would be one,” she explained.