Corporate News

Supermarkets take competition to Thika superhighway

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A Tuskys outlet. Top brand supermarkets are keen on the expanded road. Photo/Diana Ngila

A Tuskys outlet. Top brand supermarkets are keen on the expanded road. Photo/Diana Ngila 

By Mugambi Mutegi

Posted  Monday, December 31  2012 at  20:44

In Summary

  • Nakumatt, whose outlet was demolished in 2008 to make way for the modern road, is opening a new store in March while Tuskys has booked space in a mall being built 100 metres from Uchumi’s outlet. Uchumi has had a near monopoly in the targeted zone.

Thika superhighway is set to become the centre of competition as top supermarkets, led by Nakumatt and Tuskys, open mega stores on different sections of the road to cut the dominance of Uchumi.

Nakumatt, whose outlet was demolished in 2008 to make way for the modern road, is opening a new store in March while Tuskys has booked space in a mall being built 100 metres from Uchumi’s outlet. Uchumi has had a near monopoly in the targeted zone.

South African retail giant Massmart has also booked space in a Sh12.6 billion real estate development on the superhighway and will open its first store mid next year. Completion of the Sh30 billion road has seen multi-billion shilling shopping malls spring up as real estate investors and retailers seek to tap into a growing middle class with growing disposable incomes and a limited choice of leisure activities.

Uchumi Supermarkets look set to feel the pinch of the rivalry as new entrants increasingly look at residents on the hinterland of the superhighway, partly because its outlet is housed on a smaller building unlike the swanky malls hosting its rivals.

The malls have food courts, cinemas and luxury clothing lines that will offer a concentration of well-heeled shoppers, which is acting as a bait for the top supermarkets. Uchumi’s chief executive Jonathan Ciano reckons that the retail chain faces new competition along the superhighway and is revamping its outlet dubbed ‘Jipange’ to match the rivals’ bigger and modern stores.

“The inflow by supermarkets should not come as a surprise to anybody since the area has been underinvested for many years due to poor infrastructure,” Mr Ciano told Business Daily in a telephone interview.

“The third party developer who constructed the Jipange branch has already secured regulatory approvals to build a bigger building where the current store shall expand into.”

The boom in the plush shopping malls is attracting international retailers and well-known brands like Massmart, fashion group Foschini and a Mauritian retailer.

Foschini and Massmart will be based at Kenya’s biggest mall at 50,000 square-metre christened Garden City, which is situated near East Africa Breweries Limited (EABL) on a 32-acre land and about 200 metres from Uchumi’s outlet.

The mall, which is scheduled to be completed by May 2014, is expected to be bigger than Sarit Centre which measures 30,000 square-metre, Junction Mall at 26,000square-metre and Westgate Mall at 30,000sq-metre.

Make a comeback

Two kilometres away, the Sh450 million mall at the Roysambu roundabout on Thika Road, will open its doors in the first quarter and retailers like Nakumatt and luxury fashion house Deacons are some of top firms to be housed in it.

“Nakumatt Thika Road and Nakumatt Thika Town will be opened before the end of February 2013 to push us to a network of 40 stores across East Africa,” said Atul Shah, the Nakumatt Holdings managing director. “We are inundated with customer requests to make a comeback to Thika Road.”