Failure to gain regulatory approval for exclusive occupancy in the malls where it operates could affect expansion plans of retail giant Carrefour.
Majid Al Futtaim Hypermarkets, which has the local franchise for the French Carrefour brand, has applied to the Competition Authority of Kenya (CAK) seeking to protect itself from rivals in two malls where it has outlets.
The authority’s decision on these applications will inform the company’s assessment of the risks involved in expanding within the local market, said Carrefour country manager Franck Moreau last week.
However, he added, that the company was prepared to comply with whichever decision the regulator makes.
Dubai-based Majid Al Futtaim operates Carrefour outlets at Two Rivers Mall, The Hub in Karen, and Thika Road Mall.
The firm, jointly with its landlords, has made applications to protect its occupancy at Two Rivers Mall and The Hub. In the most recent application Carrefour seeks to bar owners of The Hub from leasing space to any other “similar” business until 2023.
In turn, Carrefour would agree not to open an outlet within a five-kilometre radius of the mall. Mr Moreau said that Carrefour had initially planned to open at least five hypermarkets and 10 smaller supermarkets within five years following its entry in Kenya.
However, the plans have since been thrown off balance by developments in Kenya’s retail space.
Nakumatt, the largest local retail chain, has been going through a financial upheaval in recent months which has led to the closure of a number of stores in Kenya, Uganda, and Tanzania.
Carrefour has already stepped into some of these empty spaces taking up Nakumatt’s former store at Thika Road Mall and planning to move into The Junction.