Companies

Uchumi kicks off expansion plans with 4 new branches

uchumi

Shoppers at an Uchumi outlet in Nairobi. The retail chain plans to open four new branches by May. FILE

Uchumi Supermarket is this week expected to kick off its expansion plans that will see it open four new branches by May.

The retail chain said that it would open its Juja outlet on the Thika-Nairobi superhighway this week and follow it up later with one branch each in Syokimau, Maua, and Kisumu.

Uchumi aims to reclaim market share lost to rivals Tuskys, Nakumatt and Naivas which have in recent months been on an expansion blitz.

The supermarkets grew their market share in the period when Uchumi, which plans to open 13 new stores before June, was recovering from the 2006 shut down.

Chief executive Jonathan Ciano told the Business Daily that the firm has leased a 20,000 square feet space in Juja town for 10 years and would hire 150 staff to start operations.

“We will be opening Uchumi Juja Branch anytime from next week,” he said last week.

Mr Ciano said that Uchumi’s Maua branch would open next month while the Syokimau outlet would start operations in April. The Kisumu branch opens its door in May.

The Nairobi bourse-listed retailer recently borrowed Sh300 million from the Industrial and Commercial Development Corporation, a development finance parastatal that controls about 1.75 per cent of Uchumi shares.

The move comes as the retailer prepares for a cash call that will see it offer up to 100 million shares in a rights issue targeting investors at the Tanzania, Uganda and Rwanda bourses.

The company, which already operates stores in Uganda and Tanzania, plans to use cash from the rights issue for expansion in its existing markets and open stores in Rwanda and South Sudan.

Kenya’s top retailers are racing to consolidate their market share ahead of the entry of cash-rich global retailers such as South Africa’s Massmart; which is looking to buy a majority stake in Naivas. Nakumatt is keen to sell a significant stake to a foreign strategic investor.

Uchumi’s profit grew 30 per cent to Sh357 million in the year to June and its share, which was a top performer mid-last year, at Sh17.30 is trading at a 12-month low.