Companies

Carrefour gets monopoly nod for Karen’s The Hub

hub

A shopper at the The Hub Karen, Glory Mwobobia (left) admires a Kenyan Mountain Bongo Sculpture designed by artist Godfrey Kimani (Second Left). FILE PHOTO | NMG

Majid Al Futtaim, the exclusive holder of French retailer Carrefour’s franchise in Kenya, has obtained greater protection from competition by local supermarket chains who will now be kept out of its maiden outlet at the Hub Mall in Karen.

This is after the Competition Authority of Kenya (CAK) granted the French firm rights for exclusive occupancy at the shopping complex located in Nairobi’s upmarket Karen suburb over a lease period of five years.

“Pursuant to the provisions of section 26 of the Competition Act. 2010, we wish to notify the public that the Authority has granted an exemption for clause 93 of the lease agreement between Azalea Holdings Limited and Majid Al Futtaim Hypermarkets Limited for a period of five (5) years effective from the 31st May, 2018,” said CAK director general Wang’ombe Kariuki in a gazette notice dated 23rd July, 2018 and published on Friday.

The CAK has argued that certain exemptions are provided under the Act for certain agreements that, “though restrictive or bear some risk of distortion of competition, have certain redeeming qualities.”

The application will keep at bay other Kenyan supermarket chains and retailers that may be eyeing space for similar business lines in the high-end shopping complex.

By its sheer size and location, the Hub has been generating considerable business putting Carrefour — the world’s second-largest supermarket chain after US’s Walmart — in a firm position to compete with Kenya’s more established retail brands.

Rejected

Carrefour had last year also sought clearance from the watchdog to lock out other retailers from its flagship Two Rivers Mall outlet.

The CAK, however, rejected the move on grounds that it would harm competition and that there is enough room for more retailers.

It now operates six branches in the Kenyan capital – at Two Rivers Mall, Thika Road Mall, the Junction Mall, The Hub, Karen, Sarit Centre and Galleria Mall.

It is set to open another at the Village Market in December.

It recorded a 143 per cent jump in turnover for Kenyan operations in the first six months of the year, riding on accelerated expansion of the supermarket chain in Nairobi.

The Dubai-based conglomerate made public its Kenya half-year sales in a newly-released financial report that cited Nairobi as one its strongest growth markets.

“Thanks to the group’s diversification efforts, significant growth was seen in Kenya and Egypt, with revenue increasing 143 per cent and 22 per cent respectively,” said the retailer on August 1.

Its sales in Kenya are a pointer to a highly profitable Carrefour business which, with the ongoing expansion drive, could see the supermarket chain morph into a multi-billion shilling operation.

ALSO READ: Carrefour sales up 143 per cent in first six months