Uchumi Supermarkets to reopen Uganda, Tanzania

Uchumi Supermarkets is readying itself to return to Uganda and Tanzania, despite having burnt its fingers in the two markets.

The retailer operated in the two countries for five years without profits before throwing in the towel in 2015.

The company, however, is yet to finalise the payment of debts to suppliers in the two markets since it shut down operations.

Uchumi Supermarkets CEO Julius Kipng’etich said the retailer would take a more cautious approach, initially operating one outlet to gauge market sentiment before expanding.

“Our strategy in the two markets was wrong. We took stores in bad locations and that is what affected operations. We havesuffered a case of poor locations in Kenya in the past, but Uganda and Tanzania were the worst,” he said.

He, however, declined to say when the retailer would be going back to the two countries.

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Dr Kipng’etich, speaking at Uchumi’s Annual General Meeting yesterday, said the company had in January received the first tranche of bailout funds from the Treasury. It expects to receive the second tranche in April or May.

The Treasury agreed to give the retailer a bailout of Sh1.2 billion. Uchumi is also expecting Sh600 million that will be used to pay suppliers in Uganda and Tanzania, bringing the total shareholder loan to Sh1.8 billion.

The retail chain has in the recent past experienced a drop in foot traffic due to empty shelves in its stores. Kipng’etich said the money advanced by the Treasury would help in stocking.

“Our customers are going to see change ... we will leverage on the funding from Government together with goodwill from suppliers to increase the stock in the outlets,” he said.

Kipng’etich added that Uchumi is still shopping for a strategic investor to raise Sh5 billion to fund operations.