New York Stock Exchange-listed research firm Nielsen has ranked Kenya Africa’s second biggest formalised retail economy after South Africa, in a consumer report that studied five sub-Saharan Africa economies.
Data from the survey which was released on Monday shows that 30 per cent of Kenyans do their shopping in formal retail outlets compared to 60 per cent in South Africa.
Kenya, a growing middle income economy, is ranked ahead of Ghana which has only four per cent of its population shopping in formal retail shops, and both Cameroon and Nigeria, in which only two per cent of shoppers visit supermarkets.
“Even in Kenya, regarded as one of Africa’s most developed retail markets, traditional trade still accounts for 70 per cent of sales,” noted the Nielsen report.
The survey indicates that 41 per cent of Kenyan shoppers frequent formal retail outlets because of the wide range of products they offer, which they cannot find in the traditional outlets.
The report says the most prevalent traditional stores in the studied countries are convenience outlets—table tops, kiosks, market stalls.
Others include cosmetic outlets, telecom kiosks, drugs (pharmacists) and catering and leisure shops.
Twenty per cent of traditional stores in Kenya are convenience outlets while 33 per cent are groceries. In Cameroon, convenience outlets account for 48 per cent of the informal trade shops.
However, the Nielsen report says that although grocers and supermarkets offer consumers a wide range of products at competitive pricing, they are hard to access for consumers who do not have their own transport.
“It is true that large African and international retailers such as Shoprite, Woolworths, and Carrefour are making investments in modern trade formats. But traditional outlets will continue to be a significant channel for reaching consumers for some considerable time to come,” read the report.
The survey says that consumers visit grocers mainly to replenish their supplies. “When it comes to table tops, location is the main attraction,” the report says, adding that they also offer convenience and are trusted.
The formal retail market in Kenya has grown exponentially in the past three years. Small retailers such as Mulleys & Sons in Machakos, GreenMart, QuickMart, Maathai Supermarket, EastMatt and CleanShelf are expanding rapidly, offering competition to the more established retailers.
READ: Maathai Supermarkets opens its first store in Nairobi
Big players like Nakumatt, Tuskys, Uchumi and Naivas are also opening new stalls across country. French retailer Carrefour has booked space as the anchor tenant at Two Rivers Mall in Kiambu.