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Nakuru County, the unsung birthplace of giant retailers

By Stephen Mkawale | Published Sun, July 29th 2018 at 00:00, Updated July 28th 2018 at 23:40 GMT +3
Naivas Supermarket in Nakuru Town. The three largest retail chains in Kenya started in the county as small convenience stores. [Harun Wathari, Standard]

As the growth of the retail market gathers momentum, Nakuru County stands tall among other regions, being the birth place of five dominant supermarket brands.

Indeed, the tale of Kenya’s leading supermarket chains cannot be complete without the mention of Nakuru where they sprung up as small retail outlets before their transformation into retail giants.

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Three families associated with Nakumatt Holdings, Tuskys and Naivas supermarkets have shaped the face of retail business in recent years. The three brands are household names in Kenya.

Tuskys, for instance, traces its roots to a small grocery shop in Rongai, Nakuru County, started in the 1970s.

Yusuf Mugweru, one of its directors, recalls when his father decided to merge his ‘duka’ and a wholesale shop he acquired after it closed down.

“My father merged the businesses into a store and called it Magic Superstore,” he says.

This eventually spawned a supermarket on Pundit Nihru street in Nakuru town and eventually a branch on Mfangano street in Nairobi. 

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The supermarket adopted the name of the nearby Tusker Bus Stage and rebranded to become Tusker Magic. 

After a short while it dropped the “Magic” part of the name and, in the fashion of the day, adopted the “mattresses” tag.

“It was after our last major rebranding that Tusker Mattresses became Tuskys,” says Mr Mugweru.

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Tuskys, which recently announced a three-year plan to increase its branch network in Kenya and Uganda to 100, is currently running 64 retail outlets.  The expansion expected to be complete by 2020 will be undertaken at a cost of Sh3 billion.

Middle class

The transformation of the retail market is underpinned by a rising middle class with disposable income and changing consumer lifestyles.

Supermarkets have in recent times ventured into the sale of cooked food, endearing themselves to a large population of young urban dwellers.

The retailers are also involved in the sale of fresh vegetables, fruits and milk as well as operating bakeries and butcheries.

Nakumatt, until recently the largest supermarket chain in Kenya, was founded in Nakuru by Has Hashmuk Shah.

He employed his brother, Magnalal Shah, after the latter’s clothing store collapsed under debts. 

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Magnalal, with the help of his sons, Vimal and Atul, eventually paid off his debts and bought off the corner retail shop from Hashmuk. 

From a 10-square foot emporium it grew to what is now known as Nakumatt - an amalgamation of “Nakuru Mattresses”. 

It had 30 stores in Kenya, three in Uganda and Rwanda, and one in Tanzania, before cash flow problems forced a severe cutback in numbers.

The retailer is currently under administration. Its owners say it has embarked on a business recovery programme with a focus on seven key branches.

As part of the recovery strategy, the firm started restocking of seven key branches in Nairobi, Nakuru and Kisumu, which will act as its growth foundation.

Chief Executive Atul Shah told the Sunday Standard that the firm is collaborating with the court-appointed administrator Peter Kahi to recalibrate the business operations.

Already, the seven key branches – Nakumatt Mega, Prestige, Ukay, Lavington, Embakasi, Mega City (Kisumu) and Nakumatt Nakuru - have launched afresh with a variety of sales offers.

Naivas Supermarket is another giant retail outlet that traces its roots to Nakuru County.

It started as Rongai Self Service Stores - serving mainly residents of Rongai in Nakuru.

Its founder Peter Kago died in May 2010, leaving the supermarket in the hands of his children.

Just like the other three leading supermarkets in the country, Naivas is a family business that transformed from Naivasha Self Service Stores before rebranding to the current Naivas in 2007.

In August 2013, Massmart, a South Africa-based subsidiary of retail giant Walmart, offered to acquire a 51 per cent stake in Naivas at a cost of Sh3 billion, which would give it a controlling interest.

The bid triggered a feud at family-owned Naivas, and some family members asked a court to block the sale. In October 2013, Naivas said they were no longer selling the stake to Massmart.

Almost a year later in July 2014, Naivas opened a store in Garissa, making it the first major retailer to open an outlet in the town. 

Then there is Woolmart Supermarket that operates three retail outlets in Nakuru Town while its sister company Transmart operates two branches in Eldoret and Kitale.

Reduced network

A few years ago, Woolmart Supermarket reduced its branch network after it sold its four branches in Nairobi to Nakumatt.

Haraka Kanini Enterprise, which deals in retail and wholesale, has also proved to be a force to reckon with as supermarkets struggle to spread their wings across the country.

The store, which started with one shop in Nakuru town after shifting from Kinangop, now operate branches in Thika, Meru, Narok, Engineer (Kinangop) and Naivasha towns.

There is also Gilani’s Supermarket, Stagemart Supermarket and Rivanas Supermarkets which although they have not opened branches outside Nakuru, have over the years been dominant players in retail and wholesale within the county.

Since colonial times Nakuru has played a pivotal role in the growth of entrepreneurship and development of the country’s economy.

The colonial economy anchored on agriculture was supported by key institutions that were established in Nakuru as early as 1908.

Among the key institutions set up by the settlers included Unga Limited, the Pyrethrum Board of Kenya, the Kenya Co-operative Creameries and the Kenya Farmers Association.

The four organisations played a crucial role in the transformation of the country’s economy.

Their presence in Nakuru propelled the region to the national limelight.

 


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