Uchumi targets sales of Sh18bn in the next year
Posted Thursday, October 18 2012 at 21:09
Uchumi Supermarkets expects sales to rise by a third to Sh18 billion in the year ending June as it prepares to open 12 new branches in the next 12 months.
The company’s sales grew to Sh13.9 billion in the year to June compared to Sh10.7 billion, its profit dropped by a third to Sh273 million due to rising operating costs mainly attributed to opening three new stores in Uganda, one in Tanzania and two in Kenya during the period.
“In the coming financial year we expect our sales to increase to Sh18 billion driven by the maturity of the greenfield branches we have opened,” Jonathan Ciano, the CEO of the retail chain said yesterday at an investor briefing.
He said the company — which has recovered after being shut down for a month in mid-2006 due to insolvency — planned to open another eight branches in Kenya and one more in Tanzania and three in Uganda in the coming year.
A study by Citigroup identified East Africa as the next growth frontier for huge South Africa retailers as well as some of the world’s biggest investors keen to cash in on a rising consumer demand.
Kenya has the second most developed retail market in sub-Saharan Africa with about 30 per cent of retail shopping being done in formal outlets, added the study, whetting the appetite of global chains.
A study by Citigroup identified East Africa as the next growth frontier for SA retailers as well as some of the world’s biggest investors keen to cash in on a growing middle-class and rising consumer demand.
Already, South Africa’s retail giant Massmart is looking to set up shop in Kenya, through its subsidiary Game, with its first store hosted at the upcoming property dubbed Garden City on the Nairobi’s Thika Superhighway in 2014.
Courts, the largest consumer electronics and furniture retailer in Mauritius, also plans to open its first mainland Africa store in Kenya by the end of November.
Uchumi’s expansion plan targets reclaiming its market position now occupied by main rivals Tuskys and Nakumatt and second-tier players Naivas and Ukwala.
The retailer’s total operating expenses increased 49 percent to Sh2.74 billion in the year.
On Tuesday it declared a dividend of Sh0.30 a share for first time since 2002.