Uchumi restocks 19 out of 20 branches in revival plan

Retail chain Uchumi #ticker:UCHM has so far restocked 19 out of its 20 branches across the country, hoping to ride on the festive season to make a comeback in the market.

Mohamed Mohamed, Uchumi Supermarkets’ acting chief executive, said the retailer had chosen to begin with the restocking of hyper stores and those in strategic upcountry locations to tap shoppers leaving Nairobi for the holidays.

The list of Uchumi hyper branches that were fully restocked by last Friday in Nairobi include the Capital Centre store on Mombasa Road, Ngong Hyper and Sarit Centre.

“All our stores except the Karatina branch have received stock (as at Monday afternoon) and we continue to get more stock from our suppliers. Our main focus now is on fast-moving consumer goods so that the cash is not tied up,” Mr Mohamed said, adding that the retail chain had used “slightly above half of the Sh500 million budgeted for supplies.”

Uchumi had last Wednesday closed its stores in Nairobi for what it described as “cleaning and restocking” ahead of the high shopping Christmas season, signalling a near breakthrough in the protracted talks with a potential strategic investor and a lock down on the Sh3 billion Kasarani land sale.

READ: Inside the Sh7bn turnaround plan for Uchumi supermarket

The restocking started last Thursday with Nairobi’s Capital Center branch and subsequently in the Meru, Eldoret and Mombasa branches. Workers at Uchumi’s Karatina branch were however forcibly evicted from the premises Friday afternoon and the few goods in the store thrown out of the building over non-payment of rent arrears amounting to millions of shillings.

“The Karatina drama had nothing to do with arrears since rent had been paid up to November. We are discussing the matter with our legal team even as we remain focused on maintaining a presence in Karatina,” said Mr Mohamed.

Uchumi reported a 39 per cent improvement in its loss-after-tax position in the financial year ended June attributed to “improved cost management” that helped it to improve its margins. The retailer recorded a Sh1.7 billion loss after tax during the year, compared to a Sh2.8 billion in the previous year.

Over the last year, Uchumi slashed its branch network regionally and in Kenya to just 20 outlets. This hurt its net sales, which dropped 60 per cent to Sh2.6 billion, while improving its margins.

The company’s auditors gave it a qualified opinion, citing inability to conclusively compare last year’s financial record to 2016’s after Uchumi’s outlets in Uganda and Tanzania were shut down.