Eastmatt Supermarkets has taken over a Tuskys store in Nairobi’s city centre that was shut down due to a lease dispute, highlighting the vicious fight for space among Kenya’s top retailers.
The retail chain, which has six outlets, will in March occupy the space next to the Fire Station on Tom Mboya Street, which housed Tuskys Daima branch.
Tuskys closed the store in the last week of December after it failed to agree lease terms with the landlord.
Now, Eastmatt has started rebranding the store as retailers including Naivas, Nakumatt and Uchumi announce multi-million shilling expansion plans to grow and defend their market shares.
This has sparked aggressive search for retail space in prime zones, which led Tuskys to acquire three Ukwala outlets and has triggered a row between Uchumi and its landlord on Ngong Road.
“We will start operations in the next two months. We are currently doing renovations,” said Geoffrey Kamau, a director of Eastmatt, without giving details.
The family-owned EastMatt is looking to replicate the growth of retailers Naivas and Tuskys — which both started as small shops before morphing into top retailers that have attracted buyout interests from global chains like Massmart.
Naivas has 29 branches while Tuskys has 50 and they have significantly cut the market shares of Uchumi and Tuskys.
Eastmatt, which started operations in 1990 in Mau Narok as Eastleigh Mattresses, is a small operator with its six branches in Tala, Mwea and Kitengela as well as three city branches including stores in Eastleigh Section III, Mfangano Street and River Road within the city centre.
But its focus has now turned to the city centre where the Tom Mboya street store will becomes its seventh outlet as it plans more branches in Nairobi’s Central Business District (CBD).
Its new store is near bus stages that served Kasarani, Zimmerman, Kahawa, Githurai, and Eastleigh estates. It will also target those leaving town to Ruaka, Huruma and Kabete.
The business model of establishing stores near bus stops has served Tuskys well in its strategy of eyeing the large number of working class using public transport.
But Tuskys remains the dominant operator in the city centre. The retailer now has 11 outlets including two of the three stores it acquired from Ukwala that includes Ronald Ngala and Tom Mboya branches.
Nakumatt has four branches while Uchumi and Naivas have two stores each in Nairobi’s CBD.
The Daima branch was closed after Tuskys failed to match the lease fees demanded by the owner of the building who also owns Kiriri Women’s University of Science and Technology, according to sources familiar with the fallout.
The Business Daily did not manage to establish the nature of the lease charges that forced Tuskys to shut down one of its most lucrative stores.
The lease row pitting Uchumi and its landlord on Ngong Road branch is being watched closely by rival retailers keen on using the space.