Foreign-owned retail chain Carrefour Kenya posted a 4.3 percent decline in sales to 1.05 billion United Arab Emirates dirham (AED) equivalent to Sh38.5 billion in the financial year ended December 2023, blamed on the weak shilling.
Majid Al Futtaim, the operator of Carrefour's franchise in Kenya, says in the latest annual report, the sales dropped from AED1.1 billion (Sh40.4 billion) it had posted in the previous year.
The multinational restated the 2022 financials, with sales from Kenya changing from the AED1.14 billion (Sh41.9 billion at current exchange rates) it had earlier reported.
The report puts the value of Carrefour Kenya assets at AED325 million (Sh11.9 billion), a 19.3 percent decline from the previous year.
The lower revenue came in the year the shilling declined 21.2 percent against the UAE currency. In Kenya shilling terms, however, the Kenyan supermarket operation likely grew its sales.
Majid Al Futtaim entered Kenya in 2016 when it opened the first Carrefour store. The retailer last year added three outlets to bring its branch count to 22 in a market where its major rivals—Naivas Supermarkets and Quickmart—have also been on an expansion drive.
The firm, with operations in over 15 countries, said revenue from Egypt, Pakistan and Lebanon also fell because of currency devaluations, while sales in Middle East markets including Oman, Saudi Arabia, Qatar and Jordan got impacted by consumer sentiment due to geopolitical tensions.
Overall, Majid Al Futtaim's retail sales fell by four percent to AED24.65 billion (Sh905.8 billion) compared to AED25.78 billion (Sh947.7 billion) posted in the previous year.
“We are not immune to the impact of regional geopolitical challenges on consumer sentiment and behaviour nor the various economic headwinds that have led to currency devaluations in Egypt, Kenya, Lebanon and Pakistan,” said Ahmed Galal Ismail, CEO at Majid Al Futtaim.
In Kenya, Carrefour has gained popularity over discounts on its goods but this has come under sharp focus, with several suppliers reporting it to the Competition Authority of Kenya (CAK).
CAK last year hit Carrefour with a Sh1.1 billion fine over the structuring of its contracts with suppliers. The competition watchdog found the retailer’s contracts to be lopsided and amounting to abuse of buyer power but the retailer defended itself and said it would appeal the decision.
Naivas remains the leading retailer in Kenya by branch network, having hit 100 by the end of December last year. This is ahead of Quickmart with an estimated 59, Chandarana with 26 and Cleanshelf with 10.
These supermarkets have filled the void left by Tuskys, Uchumi and Nakumatt—all whose growth traction was scuttled by massive debts to banks and suppliers.
