Uchumi Supermarkets strikes new deal with sub-tenants

Uchumi Supermarkets Ltd and its specialty partners yesterday agreed to continue their relationship under a new mutually acceptable framework that benefits all.

Uchumi Chief Executive Julius Kipng'etich yesterday led senior management to meet with the partners and both parties agreed that the current impasse was not good for their businesses.

"We need you as partners and are willing to immediately start working together with those who are ready," said  Mr Kipng'etich. In the new arrangement, Uchumi would reserve some categories of goods, which will only be provided by the retailer at the various stores.

Kipng'etich said specific goods including fresh and dry foods, and fast moving consumer goods were central to Uchumi's operations and could therefore not be offered to partners. Uchumi had issued a one-month eviction notice to its sub-tenants in mid August, informing them of a change in strategy.

The tenants who pay a commission on their sales to Uchumi had protested against the planned eviction, which would have come into effect in mid-September. Uchumi conceded that the review of contracts was necessary because there were numerous discrepancies in the current arrangements.

"The new contracts must be a win-win for each of us unlike the current situation where Uchumi loses out because of skewed terms," the retailer's chief executive said. Kipng'etich said Uchumi and its partners would agree on merchandising standards and store designs that would ensure efficient utilisation of space.

One of the partners, Jimi Gitau of Booker Tee Enterprises Limited, said he and others were ready to put aside their differences and begin working with Kenya's oldest retailer.