Abuja Traders Turn to Online Sales as Rising Shop Rents Increase Business Costs

Rising shop rents in Abuja are forcing small business owners to reconsider how they operate, with some turning to online sales to reduce expenses and keep their businesses running.

A survey conducted by the News Agency of Nigeria (NAN) in Abuja revealed that increasing commercial rental costs, alongside electricity bills, transportation expenses and declining customer patronage, are putting pressure on small businesses.

Some traders said shops that previously cost between ₦500,000 and ₦700,000 annually are now being rented for between ₦900,000 and ₦1.2 million in certain locations.

The rising costs have pushed some business owners to consider relocating, reducing their operations or moving their businesses online through social media platforms.

A fashion accessories dealer, Ikechukwu Chidi, said he was considering closing his shop following plans by his landlord to increase the annual rent. He explained that a significant portion of his business capital was going into rent instead of purchasing goods.

He added that if he eventually closes his physical shop, he would continue selling through social media because he could no longer afford to spend most of his earnings on rent.

Similarly, a cosmetics dealer, Abike Suleiman, said she had moved her business from a rented shop to her residence after her annual rent increased from ₦450,000 to ₦800,000.

According to her, relocating became necessary to free up money for restocking and other business expenses.

Another entrepreneur, Samuel Olushola, who operates a provision store, said increasing commercial rents were discouraging young Nigerians from establishing physical businesses. His annual shop rent reportedly increased from ₦600,000 to ₦950,000.

He noted that the cost of securing suitable commercial spaces was becoming a major obstacle for people seeking to start businesses.

A property consultant, Anita Adenekan, attributed the increase in commercial rents partly to higher property maintenance and construction costs, as well as expenses associated with providing facilities.

She, however, advised landlords to consider the financial capacity of small business owners when reviewing rental agreements.

A landlord, Chijioke Nnamdi, also acknowledged the challenges facing traders but explained that property owners were dealing with rising expenses for repairs, security, sanitation and general property management.

He advised landlords to remain open to negotiations with responsible tenants to prevent unnecessary vacancies.

An economist, Michael Onukwube, warned that rising commercial rents could affect business expansion, employment generation and the contribution of small enterprises to economic growth.

He explained that businesses spending a large portion of their earnings on rent would have fewer resources available for purchasing inventory, expanding operations and employing additional workers.

Onukwube called on relevant authorities to promote access to affordable commercial spaces and financing for small businesses.

He also noted that digital platforms could help traders reduce operating costs and reach more customers, although online sales might not completely replace physical outlets.

He suggested that combining physical and digital sales channels could provide businesses with better opportunities to remain competitive.

The development has renewed concerns about the rising cost of operating small businesses in Abuja and the need for a more supportive business environment.