It’s a good sign when foreign operators come into Kenya because the traffic means a lot of goodies like jobs, support for manufacturers and suppliers, and even cheaper pricing of goods arising from increased competition in the marketplace.
Generally, the coming in of foreign investors and brands means the economy is healthier. The retail sector is a case in point.
However, the woes now facing former retail chain giant Nakumatt, which is now discussing a merger with Tuskys, and the struggling Uchumi Supermarkets, part owned by the government, have created room for the foreign retailers to expand.
This, however, should worry the regulators, who ought to come up with measures to realign the sector because when the local operators are neutered or killed, suppliers and the producers would suffer when the foreign operators choose to import from the cheapest sources. That will hurt the economy going into the future.
Therefore, while there will be no physical gaps left when the foreign stores occupy what, for example, Nakumatt has left, the ripple effects can be disastrous without firmer regulations that support free entry, free exit, but also walk with other sectors in tandem.
It’s the right time for regulations and laws addressing management, supply of goods, and payment of suppliers, for example, to put the thriving retail sector in the right shape for both the local operators and foreign investors.