Family-owned Dukas suffer major losses, closures in 2017

A section of shops along Muindi Mbingu Street in Nairobi. [File, Standard]

If there is a greater indelible mark that Kenyans of Indian origin have left, it is the duka (small shop). The dukas came to embody an elite class of bourgeoisie retailers among the Asian community who grew their businesses from simple outlets to huge industries.

Prominent family names such as the Chandarias, Alibhai Jeevanjee all rose from the traditional duka.

Since then, the duka has become the one single business that Kenyans with a knack for business want to try their hands at as they strive to supplement their household incomes.

The traditional duka could also be facing decline as consumers troop to bigger retailers.

Goods sold

A tough operating environment ranging from stiffer State regulations to tough economic times due to inflationary pressure affected the businesses for most part of last year. Last week, a survey by a global performance management company Nielsen Holdings found out that tough economic times greatly impacted the small shops.

In the last one year, the research found out that volumes of goods sold – beverages, over the counter drugs, and food items – went down from a high of eight per cent in the quarter one of 2017, to -10.6 per cent in quarter four as the year came to an end.

In the first quarter of 2016, the volumes sold from dukas averaged at 12 per cent. “Last year, there was a lot of inflationary pressure that saw purchasing power among duka customers go down. That is why these small shops went through a difficult period,” said Jacqueline Nyanjom Nielsen, head of market development for East Africa. The research, however, was not the only pointer that dukas are facing a downward trajectory. Commenting on Nielsen’s survey, Retail Traders Association of Kenya Chief Executive Wambui Mbarire said the lobby is aware of the difficult times the businesses went through and is trying to find a way to engage the Government to find ways of helping them out.

“We are supposed to be the union for the dukas so that they have their voice. The shop owners lack management skills – bookkeeping and inventory management – the regulations, things to do with licences are a challenge that we hope the Government can help with,” said Ms Mbarire.

The shops also faced challenges - ranging from a lack of planning when starting a duka, poor record keeping, lack of a proper means to manage the credit they advance to the customers and a total lack of credit to refinance their working capital which brings stockouts and eventual deaths.

“People follow a ‘me too’ syndrome when starting a duka. Simply because a neighbour has started, then the other person wants to start without checking whether the duka will be successful,” Ms Mbarire said. Nielsen said there are more than 166,796 dukas in Kenya.

Another baseline survey conducted by TechnoServe, a non-profit organisation working to uplift the economic output of dukas also found that shop owners lack skills to run the small shops - leading to their early closures.

Working with 5,300 shops located in Nairobi’s informal settlements, Technoserve found out that these shops fail to prosper because of the owners’ lack of training in basic bookkeeping skills.

Market stalls

The survey found that by training duka owners in these areas, they were able to increase their revenues by 44 per cent, profits by 55 per cent.

The other challenge was also lack of infrastructure, especially market stalls where shops can be set up that could bring the shops closer to the customers.

The rise of huge retailers and mini supermarkets in city estates was identified as another trend that is killing the growth of dukas.

A duka owner in Nairobi said her sales volumes were low due to the increase in supermarkets and mini-supermarkets in her estate. These bigger retailers are drawing her traditional customers who only go to her for the smallest and most basic things.

“In the past, I had customers doing their monthly shopping at my shop. But in recent years, people have reverted to the supermarkets and mini supermarkets and buy little volumes from my duka,” she said.

Chandaria Industries Chief Executive Darshan Chandaria urged shop owners to reinvent themselves and counter the tough times ahead.