The Kenyan retail market is expected to demonstrate a promising year-on-year growth despite some players downscaling while others continue to expand.
“The expansion activities by retailers indicate a healthy retail sector,” says Cytonn Investments.
The sector continues to gain momentum, dynamism and vibrancy with international players experimenting in the Kenyan market and the country’s existing giants taking bold innovative steps to woo the consumer.
First, Botswana retailer Choppies opened its largest store in Embakasi, Nairobi, with prospects of offering a wide-range of high quality goods at affordable rates.
Evelyne Amondi, Choppies marketing manager says they are banking on their talented personnel in its push to serve Kenyans.
In 2017, the retailer said it will use its Ksh 29 Billion to have 20 to 25 new stores in the next three years time.
Local chains who still dominate the retail market accounting for 90.7 per cent of the market share by number of stores also continue to witness a paradigm shift.
First, Uchumi Supermarket plans to shut down the Capital Centre Mall branch along Mombasa Road and Jipange branch along Thika Superhigway in February.
Andrew Dixon, chief operating officer says this will help them to search for more strategic locations.
“We have reached an amicable decision with some of our landlords and we will at the end of this month not be renewing our lease at the said branches.” “Uchumi is proactively looking at all types of retail space that make the most business sense,” he added.
The new development will lead to a reduction of its branch network from the current 20 to 18 as part of the ongoing strategy to manage costs, settle debts and optimise cash flow.
On the other hand, Peter Obondo Kahi took over the management of Nakumatt Holdings after the Kenyan High Court granted granting administration orders in respect to the firm.
Nakumatt Holdings Managing Director, Atul Shah said: “The granting of the orders comes as a welcome relief as it will allow the business to accelerate ongoing recovery efforts particularly branch restocking and related efforts that are currently underway.”
Branches that have been restocked include: Nakumatt Mega, Nakumatt Prestige, Nakumatt Galleria, Nakumatt Lavington, Nakumatt Ukay, Nakumatt Ridgeways, Nakumatt Nakuru and Nakumatt Village.
In Western Kenya, Khetia Drapers Limited opened their latest branch in Kakamega town pushing its total branch count to 13 stores.
It currently owns a chain of supermarkets in Kitale (2) and Bungoma (3), Busia, Kisumu (2), Kisii and Eldoret (2).
It competes with Tuskys, Naivas, Nakumatt, Tesia in the Western and North Rift region.
In 2011, Khetia Drapers bought out their perennial rivals Shariffs supermarket.
Cytonn Investments, however, say “Retailers, especially local chains, however, will have to institute better financial and supply chain management processes, and strong corporate governance framework in order to avoid pitfalls encountered by Nakumatt and Uchumi.”
The sector also continues to witness the growth in e-commerce especially with the entry of Africa Sokoni which looks at bringing African customers and retailers together online in a hassle-free shopping experience.
Africa Sokoni CEO Ebrima Fatty, the marketplace’s main focus is to put the power back into the hands of the African consumer by leveraging the power of the internet and through the introduction of relevant and scalable technology solutions.
Last year, Safaricom limited launched its e-commerce platform – Masoko.
Bob Collymore, the CEO of Safaricom says “Masoko hopes to unlock the untapped e-commerce market in Kenya by connecting consumers, merchants and vendors to each other using a powerful online portal.
It offers customers the opportunity to make payments for services using M-PESA, enjoying the service’s speed, scale, security and reliability and reaches all market segments through the power of the mobile phone.”
According to Cytonn, growth in e-commerce as seen through the growth of online shops, for instance, Rupu, Kilimall and Jumia that recorded increase of 366.0 per cent in mobile sales between 2015/16 as well as the popularity of the mobile wallet and the digitization of cash systems.