Supermarkets scramble for Nairobi shoppers

A change in shopping trends in Nairobi is spawning a battle for dominance in the billion-shilling retail chain segment.

Positioned as the country’s main business hub and the most populous city in Kenya, Nairobi is emerging as the focal point of this rush as supermarket chains seek to outdo their rivals in the scramble for market share.

The announcement by Nakumatt Holdings that it has bought Woolmatt for Sh400 million is expected to spur fresh re-alignments in the retail segment.

The new acquisitions are expected to gradually fill the revenue gap left after Nakumatt’s Downtown branch — its most profitable outlet —went up in flames in a tragic accident last year.

“I am happy to confirm that we have also acquired Woolmatt branches in Nairobi as part of a move to enhance our CBD presence,” Mr Atul Shah, the chain’s managing director, said.

Uchumi Supermarkets, Ukwala and Naivas have also unveiled similar plans to defend and grow their city market share through revamping their networks and opening more stores, paving the way for a long drawn-out market share war.

As more and more Nairobi residents working in the central business district opt for the convenience and variety offered by supermarket chains in the city centre, retail chains are seeking out the industry’s new gold —location. It’s this shortage of commercial space that promoted Nakumatt to go for Woolmatt—giving it access to four branches in the city centre.

But its rivals are not about to give up: “We intend to roll out more stores in the city centre, the only hindrance is availability of prime space but we must expand,” said Mr Francis Maswili, the general manager of Naivas Ltd.

Human traffic

Uchumi Supermarket is also seeking to reinforce its presence in the CBD with focus being revamping its two CBD branches with an eye on opening more stores, according to chief executive Jonathan Ciano.

Two of Nakumatt’s new acquisitions are located in busy parts of the city centre synonymous with heavy human traffic and small businesses.

The acquisitions point to a change in tack by the chain, which is seeking to shed its high-end market image to cast its nets for a wider consumer base.

Among Nairobi’s four million residents is an emerging middle class, a good portion of which works within the city centre and which uses public transport and which forms the target market of most retail chain outlets.

Supermarkets that have positioned themselves next to bus and matatu termini have been among those that have reaped big from the changing shopping trends.

Ukwala, Tuskys, Naivas and Woolmatt supermarkets are among those with major outlets in areas of the central business district with dense human traffic.