Corporate News

Naivas steps up expansion with upmarket store

Workers do final touches on the new Naivas Supermarket to be opened in Nairobi’s Westlands area.  Diana Ngila
Workers do final touches on the new Naivas Supermarket to be opened in Nairobi’s Westlands area. Diana Ngila 

Naivas Supermarket has stepped up investment in upmarket locations with the opening of a branch at Nairobi’s Westlands set for Friday.

The opening of the branch on the busy Nairobi-Nakuru highway will bring the second-tier supermarket chain’s branches to 26 countrywide.

The Westlands branch targets commuters on the busy highway, residents as well as those working in the area.

It marks a departure from Naivas’ preference for densely-populated zones in estates and select town centres across the country with just a few situated in upmarket areas.

This has set Naivas apart from its top-tier peers—Nakumatt, Tuskys and Uchumi—that have over the years ventured aggressively into high-end areas with malls targeting the growing middle class.

“Westlands has a diverse market, including the working class, those on transit to places like Kikuyu and Kinoo and beyond,” said Willy Kimani, Naivas business development and marketing manager.

The entry into Westlands will pit it against Nakumatt, Uchumi and Chandarana supermarkets branches.

The chain has recently set up branches in increasingly affluent places like Kitengela, Ngong Road (at the newly completed Green House) and Nyali, with eyes on top-end clientele its competitors have monopolised.

Naivas Supermarket is a family business that started under the trading name Rongai Self Service Stores Ltd operating within Nakuru before expanding to Elburgon and Naivasha.

The supermarket chain, which was registered in 1998, is steered by brothers Simon Mukuha and David Mukuha, who are listed as its directors on the firm’s website.

It has over the years marketed itself as the affordable store for the common Kenyans, which informed its choice of location for its branches.

In Nairobi, the supermarket has outlets within the Central Business District (CBD), Komarock, Hazina, Ruaraka, Ongata Rongai, Donholm, Kasarani among other areas.

Entry of Naivas into Westlands comes at a time the country’s retail industry is experiencing increased activity.

Nakumatt, which is Kenya’s biggest retailer in terms of revenue with Sh38 billion in sales recorded last year, has in the past two weeks opened two branches in Thika Town and along the Nairobi’s Thika Superhighway.

Nakumatt now has 40 branches and has booked space at the upcoming Garden City mall at Ruaraka, a location where Naivas was also considering setting up shop.

“We were hoping to secure space at the mall but the talks collapsed when Nakumatt got it,” said Mr Kimani.

Tuskys, which has 45 branches, is set to open a new branch at Ruaraka in the coming months while Uchumi, with 27 branches, is also planning to upgrade its Ruaraka branch to match the rivals’ larger and modern stores.

Most developed

A Citi Group study done last year ranked Kenya the second most developed retail market in sub-Saharan Africa with about 30 per cent of retail shopping being done in formal outlets.

South Africa was listed as the most formalised market in the region, with double the proportion—60 per cent—of Kenyan consumers using formal outlets.

Kenyan customers were said to be generally loyal and value oriented, pushing retail chains to compete aggressively on prices.

Established retailers surveyed felt modern retail penetration will peak out at 45-50 per cent, as most rural area people favour informal markets over modern retail.

This explains the rush to set up new stores around the main towns.

pmutegi@ke.nationmedia.com