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Competition heats up as French retail giant enters Kenya

BUSINESS
By Dominic Omondi | May 18th 2016
Carrefour General Manager Jean Yves Genies with Country Manager Franck Moreau during the opening of their Karen branch yesterday. [PHOTO: COURTESY]

The scramble for Kenya’s middle-class is set to intensify with the entry of French retail giant Carrefour.

Carrefour, the world’s second-largest retailer, began operations yesterday at the newly built Hub shopping mall in the Karen suburb. The opening of the retail chain comes fast on the heels of the launch of two other foreign retail stores. Last year, South Africa’s Game Stores of Massmart, a subsidiary of Walmart, opened a branch at Garden City Mall along Thika Road.

Botswana’s Choppies, which recently acquired Ukwala Supermarkets also joined the fray.

But Carrefour’s competitors will not be restricted to foreign retail chains. The local retail trio of Nakumatt, Tuskys and Naivas will give Carrefour a run for its money-perhaps more than the foreign retail stores. The other big local store is Uchumi Supermarket which, unfortunately, is still bogged down in a financial mess.

And in news that might throw a spanner in the works of the frenzied retail sector, Kenya Bureau of Statistics figures showed that the performance of the sector last year was not as impressive as the growth of the hypermarkets has been.

The retail and wholesale side of the economy went down from 8 per cent in 2014 to 7.5 per cent last year, according to The Economic Survey 2016.

Create jobs

The entry of these retail stores into the Kenyan market has been attributed to the expansion of the middle-class who have enough cash to spend on consumer goods.

According to a report by the African Development Bank (AFDB), Kenya’s middle-class is about 44.9 per cent of its population.

Franck Moreau, the country manager of Majid Al Futtaim which owns Carrefour, said the firm is committed to helping local producers and helping the economy create jobs. “We have so far recruited just over 200 staff members at the Hub hypermarket and by the end of 2016 Carrefour Kenya will have a solid staff base of 500,” said Moreau.

Carrefour, which occupies 5000 square metres of shopping space at The Hub will also be the anchor tenant at the upcoming Two Rivers Mall set to open this year.

The retailer is using cost and quality as its selling points. Moreau said Carrefour will offer more than 30,000 items, including fresh produce and groceries, a fresh bakery, home appliances, electronics and general merchandise. The hypermarket is already working with more than 480 suppliers, local manufacturers, producers, and farmers across Kenya.

Majid Al Futtaim also owns and operates 19 shopping malls, 12 hotels and three mixed-use communities, with further developments underway in the region.

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