Naivas, Quick Mart, Carrefour and Chandarana Foodplus tightened their grip on Kenya’s retail sector, capitalising on the gap left by the collapse of Nakumatt, Tuskys, Uchumi, and the exit of Botswana retailer, Choppies.
Kenya’s major supermarkets opened 19 new stores last year, partly spurred by a recovery in consumer demand and cash from private equity funds which acquired stakes in two of the four retailers in prior years.
Naivas, Quick Mart, Carrefour and Chandarana Foodplus tightened their grip on Kenya’s retail sector, capitalising on the gap left by the collapse of Nakumatt, Tuskys, Uchumi, and the exit of Botswana retailer, Choppies.
Quick Mart opened six more outlets followed by Naivas and Carrefour with five each, while Chandarana Foodplus invested in three new stores, according to data collated by property fund Ilam Fahari I-Reit #ticker:FAHR .
“Footfall across retail centers has been on the rise since [second half of 2021]. It remains a tenant market," Ilam Fahari I-Reit wrote in a report on retail sector performance for 2021.
Naivas — which in 2020 raised Sh6 billion from the sale of a 30 percent stake to a consortium of International Finance Corporation (IFC), Amethis Finance (France) and MCB Equity Fund (Mauritius), and German sovereign wealth fund DEG — consequently closed the year with 78 outlets.
Growth-hungry Quick Mart, on the other hand, ran 46 branches on the back of investment from Africa-focused Adenia Partners, while Chandarana Foodplus’ and Carrefour Kenya’s branches grew to 23 and 16, respectively.
“A lot of it (expansion) was just filling the gaps left by those (supermarket chains) which had left,” Wambui Mabrire, the chief executive of Retail Trade Association of Kenya, said on phone.
“There was also PE (private equity) Funds entry into two of the large players and those PE Funds were part of what was fueling that expansion.”
Retail was amongst the sectors hardest hit by the pandemic restrictions such as the nighttime curfew which slowed down sales amidst reduced earnings by firms and households in 2020.
This came on the back of struggles in the sector which saw Botswana retailer Choppies exit Kenya, while the once giant supermarket chains — Nakumatt, Tuskys, and Uchumi— went under partly due to governance challenges.
Nakumatt, Uchumi, Tuskys, and Choppies shut operations with more than Sh30 billion in debts, including taxes.
There were, however, indications of recovery in the sector, with data from the Central Bank of Kenya showing net credit to retail and wholesale trade, jumped 136 percent to Sh41.5 billion in 2021 compared with the prior year.
