“See Our Shelves This Weekend” Nakumatt Responds to Empty Shelves Queries

Nakumatt Holdings breaks it’s silence after the public raised online media concerns that most of their outlets had empty shelves.


On Wednesday, Katiwa Mueni went online and posted a picture with nothing on the shelves and posed, “How can this be Nakumatt Junction?

How can this be nakumatt junction @kenyanpundit pic.twitter.com/AreRaKpBTo

— Katiwa.. (@mueni_4) June 14, 2017

Jim Waruz said, “Monday will come and I am mark timing to see…today  at Moi Avenue branch even the small bags for sale aren’t in stock…I just wonder.”

Chief Marketing Officer Andrew Dixon, however, went online and assured its customers  that their outlets will not be the same over the weekend. A response to Gihuywa Erick who had noted that their outlet at Junction along Ngong Road was to be the next victim.

Sorry to burst your prophetic bubble but thus far i don’t see it that way. See our shelves this weekend!

— Andrew Dixon (@Nakumatt_CMO) June 14, 2017

However, the public was not satisfied with others questioning the 24 hour shopping experience now being shifted to the weekends. “So now we are being moved from 24 hour shopping to weekend shopping? Asked Omar Bond.

Others. Came to the retailer’s rescue. “Nakumatt has been the anchor tenant for most malls in the country. Other tenants rely heavily on traffic from Nakumatt.” said Wambu.

Nakumatt has been the anchor tenant for most malls in the country. Other tenants rely heavily on traffic from Nakumatt.

— Wambui (@M_RenzoB) June 14, 2017

Since January, East Africa’s largest retail chain with 61 branches has experienced one of its worst times since beginning the last quarter of 2016.

It announced it was having  financial difficulties has seen the supermarket change its operations and cut down on stocks.

This is after their Ugandan customers complained of the absence of items their shelves and now Kenyans too are at it.

A shopper reports that these empty shelves are of @Nakumatt Naalya in Kampala. What’s going on, as Marvin Gaye would have asked pic.twitter.com/wIa2y4GQ57

— Charles Onyango-Obbo (@cobbo3) October 27, 2016

Nakumatt has  announced plans to shut down several unprofitable branches under its accelerated restructuring programme aimed at cutting operational costs by Sh1.5 billion annually.

“The branch culling strategy will start off with sub optimally performing branches for whose leases contracts are due for renewal to be followed by branches in poor locations. We have also embarked on a shelf stocks optimisation programme to enable us retain a lean variety of profitable retail products,” Nakumatt Holdings managing director Atul Shah in a May statement.

Further, there is still no update after it announced that it had received a KSh7.7 billion offer for 25 per cent stake from a foreign fund.

With more than 40 million inhabitants, Kenya is a comparatively affluent market in East Africa and is likely to experience faster growth in the modern retail sector as the economy continues its upward trend. This is despite the challenges that the economy is going through with spiraling inflation, a weak shilling and uncertainty ahead of the 2017 general elections.

“The transition has been underpinned by the country’s middle class, which represents around 45% of the 47m-person population, according to the African Development Bank, although this figure includes individuals with a consumption level of between $2 and $4 per day and those at risk of falling below the $2 poverty line, which means that formal retailers still tend to focus on the higher-income segments of the market,” according to the Oxford Business Group.

The retail sector in Kenya is rapidly expanding and diversifying, which has encouraged more investment and changed the shopping habits of Kenyans, according to a 2016 survey by Procter & Gamble (P&G). “While overall retail in Kenya grew by 13 percent in 2016, modern retail (supermarkets) grew by 18 percent, indicating the increasing importance of supermarkets as a retail channel.”

“The total cumulative figure for retail spending in 2016 is $17.62 billion (Sh1.8 trillion) which can be allocated across different channels based on 30 per cent supermarkets, 67 per cent traditional retail, and three per cent special channels. Overall, retail spending accounts for 30 per cent of Kenya’s GDP,”aid Vivek Sunder, Managing Director P&G.

Euromonitor projections show that total retail is expected to grow by 84 per cent to $ 16 Billion in 2020 from the current USD 9 billion (2015).

On the other hand, Cytonn Investments in their 2016 “Kenya’s Real Estate Retail Sector Analysis report note that growing population, a rising middle class and improved technology are some of the factors driving Kenya’s retail market as demand for quality outlets and a broader range of shopping options drives the construction of floor space.

In the report, the key retail chains in Kenya plan to increase financing through listing in the NSE and regional expansion as they focus on client retention through pricing, customer service, and product differentiation in the short term, most of the mare focusing on increasing distribution channels through organic growth, partnerships.

To tap into the emerging opportunities, the analysts say, “The ideal stores in this market are community malls with supermarket anchors and encompassing restaurants, entertainment joints and small convenience retail stores.”
The report further cites in the long run, the key retail chains in Kenya plan to increase financing through listing in the NSE and regional expansion as they focus on client retention through pricing, customer service, and product differentiation in the short term, most of the mare focusing on increasing distribution channels through organic growth, partnerships.

The rise in formal retail space has helped attract new foreign investors in the sector. Notable ones include: Carrefour,Two Rivers Mall, Choppies which acquired Ukwala outlets, Garden City Mall.

Besides, Nakumatt remains on the lead in terms of network presence followed by Tuskys, Naivas, listed retailer Uchumi.