Markets & Finance

Subway plans city centre branch after The Junction outlet

subway

A Subway restaurant at the Junction Mall in Nairobi. The American fast food chain has opened shop in Kenya. Photo/Salaton Njau

Subway, the US-based fast food chain, will open its first Kenyan franchise at the Junction Mall this Friday.

Liberty Eagle Holdings, the local holders of the Subway franchise, said opening of its premier branch will pave way for launch of additional stores in the first quarter of 2014.

“The second store should be opened in March, it will be in town,” said Liberty Eagle’s Christopher Bak in an interview, adding that the store will have an area of about 500 square feet.

Subway had planned to open three stores by the end of the year, but this has now been scaled down to one.

Rival US fast food chain KFC first entered the Kenyan market with a store at the Junction Mall that was then followed by another on Kimathi Street.

Kenya becomes the sixth African country to have a Subway outlet, after South Africa which has 15, Egypt (5), Djibouti (1), Zambia (6), and Tanzania (5).
Mauritius is the next location for the US-based fast food joint.

Globally, it is one of the largest chains with 39,512 retail units in 102 countries.

Mr Bak had earlier said that Nairobi was chosen due to the growing local demand for “higher quality food at affordable prices” and the increasing number of expatriates tracking their multinational employers who are opening regional offices in Nairobi.

The store had also said that the entry-level prices would be between Sh250 and Sh400 per meal.

Galitos, Chicken Inn, Steers, Debonairs, Pizza Inn, Naked Pizza, Spurs in addition to KFC are other major foreign chains with outlets in Nairobi.

Analysts and property developers also say that a combination of the growth in the mall culture and ongoing developments in roads and other infrastructure are other incentives for global retailers to enter the Kenyan market.

“International retailers are likewise taking notice of rising consumer demand in Kenya, with major brands like KFC, Walmart, Edcon, Group and Game moving into the market,” said the annual Broll property report 2013.

“The new Thika highway is also attracting interest from both local and international retailers, with supermarket chains Uchumi and Nakumatt, as well as Swedish furniture giant IKEA considering new developments.”

Garden City, billed as the biggest shopping mall in East and Central Africa on completion, is being constructed along the Thika highway.

Broll, a South African property management firm, set up shop in Kenya this year and has already secured management rights for the Hub Karen, a Sh4 billion shopping mall.

Top retailers are also expected to move to towns other urban centers around the country.

Buffalo Mall, a shopping complex that is being developed in Naivasha, has said it has secured some retailers and chains and is at an advanced stage in negotiations with others.