Since Prince Ebeano & Co. (Ebeano) was launched in 2009, their strategy has involved focusing on opening up large standalone hypermarkets in densely populated residential neighbourhoods. So far that has led to a total store count of 5 in Lagos and Abuja. Within Lekki Phase 1 specifically, one of the most important middle to upper-class residential regions in the country, Ebeano and many other retailers are taking an aggressive position. At the end of 2022, total grocer retail stock serving the Lekki Phase 1 region is expected to hit 16,000sqm and Prince Ebeano & Co. will control c. 35% of this, more than double any of its competitors.

Essential Retail in King 

To begin with, if we have learnt anything about Nigeria’s retail industry over the past few years, it’s the dominance and staying power of basic grocery retail. Though no-one will go unscathed when doing business in Nigeria, the country’s generally less affluent population makes it more viable to focus on essential retail such as grocery, pharmacy and white goods which usually comes in the form of super and hypermarkets. The relative resilience seen in the essential retail space became even more obvious during Nigeria’s 2015 oil price induced recession,  subsequent currency devaluations and the COVID-19 pandemic. Especially when it was compared to the performance of others in trading in high-priced fashion items, jewellery or luxury electronics in Grade A Malls.

We can segment the hypermarket space within Lagos into 3 broad categories and they include Shopping mall anchors with players such as Shoprite; standalone hypermarkets with players including Grand Square, Ebeano, Blenco, Pick ‘n Pay then anchor and hypermarket hybrids such as Spar, Hubmart, Market Square.  

Everyone loves Lekki Phase 1 and Ebeano knows it

Using the map below, we estimated that the total stock of solely grocer/supermarket retail in Lekki Phase 1 to be 7,100sqm at the end of 2020 and a 24-month pipeline of c. 9,800sqm, meaning that the total stock will be 16,000sqm at the end of 2022. 

As some consumers are willing to go short distances to get value prices, this stock amount is not only location bound, but also accounts for retail centres within a 2/3km radius of Lekki Phase 1 and/or centres that are known to be frequently visited by residents of the area. Our interesting take away is that Ebeano is expected to control c. 35% of this market. This is even with a small 900sqm entry from Hartleys in late 2021 and another c. 3,000sqm entry from Market Square expected in late 2022. The 2nd and 3rd by market share will be Artee Group (Owners of SPAR) and Sundry Markets (owners of Market Square), who will have an expected 17% and 12.6% respectively.

How has Ebeano gotten here?

We have three ideas. 

1. The relatively early position they took in Lekki Phase 1 gave them a comfortable head start against the competition.

• Over a decade ago they opened their first major location Obafemi Anibaba Street in Lekki Phase 1. This was subsequently moved to the corner of Olubunmi Owa Way and  Admiralty Way.
• During a fire incident in 2015, this centre was completely gutted but a makeshift centre in a marque-esque structure (which has aged well) was set up in 2016.
• Their smaller location in Lekki Phase 1 ‘right’ informally referred to as Oniru opened in 2017.
• Construction on a new location within Lekki Phase 1 began in 2018 and finally opened last month. The property, which is located on Adebayo Doherty Road/Road 14 was built by Construction Kaiser and is their highest specified location to date. 

• They also commenced construction on their original site where the fire incident occurred during Q4:2020. The new 3 floor retail multiplex will follow a similar format to their new store on Adebayo Doherty but will be spread out on more levels.

2. Similar to other large grocers and hypermarkets such as Spar, outside their standard supermarket offering, Ebeano usually includes spaces for other retailers to sell products. These may include fragrance stores such as Essenza, quick-service restaurants including Foodies, pharmacies including Bydow or even travel agencies. Diversification of their product mix and offering allows them to attract a wider customer base without entering markets where they may not have the ability to deliver the very best value, an excellent approach.

3. Finally, they have remained steadfast in their strategy of delivering space within the standalone hypermarket category. Since their inception, they have not deviated from this strategy, despite multiple courting attempts and there is no known knowledge of a potential deviation that may involve occupancy in formal malls.

What’s the competition like?

Competition from existing and pipeline players will make the dynamics of the market interesting as the years go by. Limited prime land availability also put a small barrier to entry for new mega retail centres to enter the market.

Shoprite in The Palms Mall was a viable competitor for serving the grocer demand for Lekki Phase 1, but the introduction of the toll gate and the completion of the Lekki Concession Road significantly disrupted access to the centre. Plans to rectify that access with Phase II of The Palms quickly vanished after the land was disposed of with the help of JLL in 2019.  The other Shoprite in the Growthpoint Investec owned Circle Mall is too far a distance for most Lekki Phase 1 residents and comes with too much traffic. Moreover, Shoprite’s decision to exit the market takes them out of the race until further plans are announced.

FreshForte, a farm to table/shelf supermarket, which opened in the amazing Studio Elementals designed complex in early 2021, is also a new addition to the market. However, their positioning as a premium or high-end grocer brand may mean that they might struggle to replicate and grow their footprint at scale because the larger percentage of grocer consumers are looking for value and low prices. The prime grocer segment, is, however, a niche that has not been filled in the region.

A handful of pipeline projects already documented in the total stock above intend to break into the Lekki Phase 1 market. They include: 

• Most notably the c. 3,000sqm Market Square within Purple Lekki on Freedom Way, 
• The unconfirmed size of the grocer retail component of Edmark City also on Freedom Way, 
• The 900sqm Hartleys in Admiralty Mall on Admiralty Road.

Though there is room for additional players to announce and execute a project, the groundwork Ebeano has done within the highly relevant Lekki Phase 1 region will give them an upper hand, even if it is for the medium-term at best. It will be interesting to see how other grocers like Hartleys, FreshForte and Market Square decide to expand their footprint in the region as they open over the next few years.