Companies

Tuskys shuts down city centre outlet in premises lease row

tuskys

Tuskys Daima branch along Nairobi's Tom Mboya street. Diana Ngila

Tuskys Supermarket’s plans to cement its hold of Nairobi’s city centre have suffered a blow after the retail chain shut down a store following a lease dispute.

The retail chain has closed its Daima branch – which is located next to the Fire Station along Tom Mboya Street– after its management failed to agree lease terms with the building’s owner.

The outlet, which has remained closed for more than a week, has been relocated to a new store along the street that Tuskys recently acquired from rival Ukwala Supermarket.

Tuskys has been aggressively expanding in the city centre where it had nine branches before buying the three Ukwala outlets, placing Kenya’s second-largest retailer ahead of rivals Nakumatt, Uchumi and Naivas.

The Daima branch was closed after Tuskys failed to match the lease fees demanded by the owner of building who also owns Kiriri Women’s University of Science and Technology, according to sources familiar with the fallout.

The Business Daily did not to establish the nature of the lease charges that forced Tuskys to shut down one of its most lucrative stores among its 50 branches.

“Dear customers, we are relocating to the former Ukwala Hyper along Tom Mboya Street,” reads a notice posted on the closed doors of the affected branch. “Sorry for any inconvenience.”

Other tenants – including cyber cafes, M- Pesa stores and barber shops – were still operating on the upper floors of the building. The caretaker of the building on Friday declined to comment on the fallout while Tuskys reckoned that the move was informed by strategic reasons.

“We are just relocating to the new location after a decision made by the board,” Peter Mbatia, marketing manager of Tuskys, told the Business Daily in a telephone interview.

The Daima branch is among Tusky’s top 10 outlets on sales in a list that includes Imara Daima, Pioneer and OTC stores. The outlet’s shut down will hit Tusky’s strategy that has seen the retail chain open stores near bus stops targeting the large number of working class that rely on public transport.

The store was near bus stages that served Kasarani, Zimmerman, Kahawa, Githurai, and Eastleigh estates. It also targeted those leaving town to Ruaka, Huruma and Kabete.

The closure of the branch is set to hurt Tusky’s sales that were a hit by a day-long workers strike — which saw the chain lose nearly Sh200 million in sales.

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 Supermarket has four branches while Uchumi and Naivas retail chains have two stores each in Nairobi’s central business district.