South Africa’s Shoprite finalises entry into Kenya’s retail market

NAIROBI, KENYA: Kenya’s retail business is headed for interesting times as South Africa's Shoprite Holdings secures seven sites vacated by struggling supermarkets in readiness for stores to be launched in Kenya soon.

Reuters on Tuesday said Shoprite Holdings will move into Kenya, where weakened competitor positions have opened an opportunity for expansion into East Africa.

“Five years ago, Kenya wasn’t considered by us because they had three very big retailers there,” said chief executive Pieter Engelbrecht on Tuesday.

“Starting last year ... the retailers in Kenya were in total disarray and we were able to secure seven sites and leases.”

Kenya’s retail landscaped has been unstable in the past few years with established supermarkets like Nakumatt and Uchumi running into financial problems leading to closure of branches.

A report released by Ministry of Industry and Trade painted the trouble in Kenya’s retail market with top five largest retail chains in Kenya owing suppliers at least Sh700 million, which was 83 per cent of the total debts outstanding by the end of 2016.

It says the two most troubled supermarkets, Nakumatt and Uchumi, alone accounted for 73 per cent of the debt, making the two the worst nightmare for suppliers.

Nakumatt led in debts to suppliers, owing Sh278.9 million by December 2016, according to findings from the small sample. It was followed by Tuskys, which owed Sh174.8 million, while Uchumi Supermarkets came third with a debt of Sh123 million.