Tuskys Supermarkets have been hit hard by the Covid-19 crisis and its suppliers are now seeking intervention from the Government to ensure the retailer pays all dues owed to them.
Tuskys ‘ Suppliers are in fear that the retailer will not pay its dues after it announced that it is facing a cash crisis due to the Covid-19 pandemic that has affected the whole economy.
The suppliers are comparing Tuskys’ situation to that of Nakumatt and Uchumi who went into a full-blown debt crisis but sunk with debts owed to suppliers.
Tuskys which earlier held talks with Kenya Association of Manufacturers (KAM)and the Competition Authority of Kenya CAK, promised to come up with resolutions to honor its debts, but the retailer said it would not make the payments to its suppliers in due time.
According to a letter by KAM Chief Executive Phylis Wakiaga, the delayed payments by Tuskys to suppliers will hurt the whole manufacturing sector adding that the retailer should provide detailed information on when it would pay its debts.
Ms. Wakiaga argues that the situation is now causing apprehension within the manufacturing sector and which may lead to a low supply of goods in the market in order to manage their risks.
Ms. Wakiaga asked Tuskys officials to meet with the KAM and CAK to discuss further on when the payments would be paid.
Tuskys had earlier complained that measures to contain the spread of Covid-19 including reduced working hours and social distancing have adversely affected its business.
Tuskys has been forced to shut down some of its stores and as well merge others as it seeks to reduce losses during the Covid-19 crisis.
“Despite these efforts, some supplier obligations may be deferred and therefore some of your members have been impacted. We have communicated individually to these suppliers that their payments will be delayed, ” said Tuskys Chief Executive Dan Githua.
The Tuskys Chief said the company’s financial constraints will cause a reduction of payments to suppliers, banks, and landlords. Customers have also reported reduced stocks in most outlets.