Small stores grow into giant retail chains in a decade

On December 17, 1976 Uchumi Supermarkets shareholders signed an agreement with Standa SPA of Italy to manage the chain, marking a turning point for retail chains in Kenya.

Standa was also tasked with training Kenyan personnel who would eventually take over the running of Uchumi, then controlled by government agencies Industrial Commercial and Development Corporation (ICDC), Kenya Wine Agencies Limited (KWAL) and Kenya National Trading Corporation (KNTC).

Standa, a leading supermarket group in Europe, set Uchumi on a strategy where price, quality and service would give it a competitive edge over other grocery shops and stores. Uchumi is today one of the largest retailers with 20 branches in Kenya, four in Uganda and one in Dar es Salaam.

A generation after it was founded Uchumi suffered liquidity problems in 2006 and was closed, before a government bail-out restored five stores into operation after a month.

It has recovered steadily since and is now profitable. With the expansion of the middle class, however, Uchumi has had to contend with competition from family owned retailers led by Nakumatt, Tuskys, and Naivas.

Nakumatt, formerly Nakuru Mattresses, was founded by Has Hashmuk Shah. It was later taken over by his brother, Magnalal, who, with the help of sons Vimal and Atul, transformed the corner shop into the leading retail chain it is today.

Nakumatt has over 30 stores in Kenya, three each in Uganda and Rwanda, and one in Tanzania. Tuskys Supermarket was started in the late 1970’s as a shop in Rongai, Nakuru.

When the wholesaler who supplied the shop closed, the owners of the grocery bought it and merged the businesses into a store and called it Magic Superstore.

This eventually spawned a supermarket on Mfangano Street in Nairobi. The store adopted the name of the nearby Tusker Bus Stage and rebranded to become Tusker Magic. It eventually dropped the name Magic in favour of Mattresses.

Tusker Mattresses Limited was registered as a company on May 18,1990, and rebranded in 2007, changing its name to Tuskys. The company is presently rocked by sibling rivalry with three brothers accusing each other of mismanagement and embezzlement of money.

Police investigations

John Kago Kamau, Samuel Gatei Kamau and Yusuf Kamau charge that Stephen Mukuha Kamau has excluded them from running the company’s affairs. The allegations are under police investigations and, apart from bad publicity, have done little to stunt Tusky’s growth.

Tuskys today boasts of 48 branches as supermarkets upgrade to malls — all under-one-roof shopping and leisure sites.

Only this month the asset management arm of South Africa’s Liberty Group, Stanlib, said it would invest Sh5.2 billion in shopping malls in Kenya within the next two years.

Private equity firm Actis is developing Garden City Mall along Thika Superhighway in Nairobi which will have 35,800 square metres of space, arguably one of the largest shopping facilities in East and Central Africa.

Other popular shopping malls in Nairobi include Sarit Centre, the Junction Mall and Westgate.