Fall of giant retailers ushers in era of smaller supermarkets

Business Daily Kenya:  Zachary Ochuodho @zachuodho The fall from grace of the two giant supermarkets, Uchumi and Nakumatt, has given small...

Business Daily Kenya: 

Zachary Ochuodho @zachuodho

The fall from grace of the two giant supermarkets, Uchumi and Nakumatt, has given smaller retailers the leeway to thrive. Nearly three years after the two chains’ trouble began, several small supermarkets have emerged, filling in the space left by Nakumatt and Uchumi.

The family-run Nakumatt supermarket was once the symbol of the “Africa Rising” narrative. In 2014, Nakumatt took over the Tanzanian stores of South Africa-based Shoprite Holdings Ltd, a sign that the retailer was doing well. Not so long after, however, Nakumatt woes saw it loose chain after chain.

The nearly-empty shelves and deserted outlets from the supermarket, coupled with those of Uchumi, have been filled up by several local and international retails.

Foreign companies that have set base in Kenya include Carrefour – a French retail, Choppies Enterprises Kenya – a Botswana retailer, Supprite and Game Stores all from South Africa.

However, there are many firms that have also emerged to fill the yawning gap. Statistics indicate that between 25 and 30 superstores have been established in various parts of the country.

At the Nairobi Central Business District (CBD), Naivas and Tuskys’ reigh supreme with the rest of the stores setting up shop in estates, providing convenience for shoppers in their localities. Interestingly, no single supermarket has filled the space left behind by the fallen giants, with whatever space they have left being fragmented among smaller retailers in different counties.

Upcoming supermarkets are looking to tap into middle and low-end shoppers who are increasingly becoming a force to reckon with in the country. A study done by Procter & Gamble in 2016 reveals that Kenya’s retail expanded by 13 per cent and that with a total spend of Sh154.27 billion ($17.5 billion).

The survey attributed rapid expansion of the retail sector to shopping dynamics. “Kenyan consumers’ habit of shopping goods in bulk as opposed to when the need arises were part of the reason,” said the report.

Supermarkets’ share accounted for 30 per cent of the Sh154.27 billion (US$17.5 billion), with 67 per cent going to shops and the rest to special channels like online marketplaces.

Supermarkets that have thrived since the trouble started in Uchumi and Nakumatt include Budget Supermarkets, Chandarana, Eastmatt Supermarkets and Rikana Supermarkets.

The post Fall of giant retailers ushers in era of smaller supermarkets appeared first on Mediamax Network Limited.

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