Naivas to run Garissa branch under franchise

Naivas Supermarkets plans to run the Garissa branch under a franchise arrangement to minimise chances of a terror attack on its staff.

The retailer’s Garissa branch was closed after the recent attack on Garissa University which left 148 dead, majority of them non-Muslims from other parts of the country.

Under the franchise model, investors from the county will purchase the rights to open and run the Naivas Garissa branch and pay a fee to the retail chain.

“The cost that will come with initial buying of the rights is confidential, but we are in talks with people who will broaden our brand in the area while maintaining the service value we have been offering to the local community,” said the Naivas business development and marketing manager Willy Kimani in an interview.

The family-owned retailer is the only one of the big five Kenyan supermarkets that had a presence in the county. Naivas expects to re-open the Garissa branch “soon” but under new management.

“The Garissa branch was one of our most profitable given there was minimal competition, but due to the security situation in the area we have resolved to enter into partnership with local business operators instead of exiting altogether with a brand that was already well known,” said Mr Kimani.

Garissa town, which is near Kenya’s border with Somalia, has for decades suffered insecurity due to political and economic instability in the neighbouring country.

Early this month, The Al-Shabaab militant group stormed Garissa University College campus and killed at least 148 people.

Despite the security fears, the town remains an economic hub that has for long attracted big companies including commercial banks such as Co-operative Bank, Postbank, First Community Bank, Barclays, among others.

Naivas Supermarkets opened the Garissa outlet in July last year. It had a workforce of 120. The retailer describes its closure as a big blow given there were plans  to open another branch  in the area and  an additional three in the neighbouring towns.

The Garissa branch was started at a cost of Sh95 million.

The retailer said it had already made elaborate plans to open more branches in Mandera town, Wajir and Isiolo by next year.

“We had given preference to Isiolo   town which we expected to open  by next year  but we will be reviewing  the  security situation in the area  with possible entry  if the condition  improves,’’ added Mr  Kimani.

He, however, did not wish to disclose how much loss they have incurred during the closure. The Mandera, Wajir and Isiolo branches were expected to employ 240 staff, with a capital expenditure of Sh270 million.

The former employees of the Garissa outlet have been absorbed in other branches and the goods redistributed to other areas where the retailer has operations.

Naivas had taken a   vantage position by establishing an outlet in the area where its main market rivals such as Nakumatt, Uchumi Supermarkets Ukwala and Tuskys have not made inroads. It had leased 18,000 square feet.

The retailer has mainly been setting up in densely populated areas.

In October last year, Naivas announced that it would increase its staff by 450 employees with the opening of new outlets in Nyeri, Githurai 45, Kisumu and Bamburi in Mombasa.

By then, it had a workforce 4,800. Naivas is classified   locally as the third-biggest retail chain, although it has not expanded its footprint in the neighbouring countries compared to its rivals Nakumatt, Uchumi and Tuskys.