Naivas Supermarket Opens 60th Outlet Nationwide in Nakuru

Naivas Supermarket, during the week ended, opened its 60^th outlet in Kenya at Nakuru town following recent openings in Mombasa and Ngong Town.

Naivas has opened its doors to shoppers in Nakuru in Westside Mall, in the exact location where Nakumatt Holdings previously carried out its operations.

The move to open new outlets across Kenya is in line with the retailer’s expansion strategy aimed at widening its market share by tapping into Kenya’s rapidly-growing urban cities and satellite towns.

Additionally, in the wake of increased competition from retailers such as Tuskys and Quickmart, Naivas supermarket is rushing to establish its roots across major towns.

According to Cytonn Investments Weekly report, the retail sector has continued to record increased activities, in major towns such as Nakuru attributed to:

1. Positive demographics in Nakuru with the population growing at an average of 3.0 percent p.a., compared to the Kenyan average of 2.2 percent p.a.,
2. Improving infrastructure with the expansion of the Nakuru-Nairobi Highway, which has encouraged a growth in mall space as this encourages tenancy and footfall,
3. The availability of relatively low- priced retail spaces. According to Cytonn Kenya Real Estate Retail Report 2019, Nakuru recorded average rent prices of 59.2 shillings per SQFT, compared to the market average of 118 shillings per SQFT

Despite the low rents, Nakuru town does not offer an attractive opportunity for investors due to its poor performance recording rental yields of 4.5 percent in 2019, 2.5 percent points less than the market average of 7.0 percent.

This is mainly attributed to competition due to lower rental rates offered from more established mixed-use developments (MUDs) that are in the market such as CK Patel and Shoppers Paradise.

The table below shows the retail performance of key urban cities in 2019:

“We expect the retail sector to remain vibrant with local retailers such as Naivas, Quickmart and international retailers such as Carrefour and Game continuing to expand to take advantage of the relatively low formal penetration rates, especially in regions outside Nairobi as well as to take up prime spaces that are vacated by struggling retailers” reads part of the Cytonn Report.

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