Retailers target upmarket zones after Nakumatt fall

Local retail chains are tailoring products and services for new outlets in upmarket areas as they try to capture niche customers previously served by troubled Nakumatt Supermarkets and smaller shopping marts.

In a bid to compete with Chandarana Food Plus and newcomer Carrefour, Kenyan supermarkets including Naivas, Tuskys and QuickMart have been serving up specialty cheeses, fish aisles complete with salmon as well as meat sections with assorted cuts to cater to the needs of Nairobi's high-end market.

They are also booking larger spaces that allow for wider supermarket aisles and thus a better shopping experience for discerning customers.

Naivas, for instance, recently set up branches at Capital Centre (Mombasa Road) and Ciata Mall (Kiambu Road), areas where the clientele is perceived to have higher spending power. At these outlets, the firm is offering shoppers wider aisles and a wider product range including a ‘healthy’ snack section, which are absent from their central business district outlets.

“We have to do profiling when opening a new store. This is to see what product goes to which store,” said Naivas chief commercial officer Willy Kimani in a telephone interview with the Business Daily.

The retailer, which recently hired UK-based consultant Andreas von Paleske to guide its expansion, has been setting up shop at malls with sufficient parking and also giving a more spacious in-store experience as compared to its older branches.

Naivas’ Ciata Mall outlet is located right across Ridgeways Mall, which housed Nakumatt Supermarkets until the branch’s recent closure.

Nakumatt served residents of upmarket Ridgeways and Runda estates, leaving a gap now filled by Naivas and Quickmart Supermarket located further down the road.

The reason for the shift in strategy, according to Mr Kimani, is that the new outlets must be sustained by the existing population for them to be viable.

Tuskys

Tuskys also dipped its toes in Nairobi’s premium segment last year with the relaunch of its Muthaiga branch from a quick store to a full supermarket. The store — targeting the upmarket clientele around Muthaiga, Nyari, Kitisuru, Kyuna, Spring Valley and Rosslyn estates —features exotic imported chocolates, frozen foods, an alcohol-free wine cellar, sauces and food condiments, cheese, cosmetics, lotions and shampoos and pets’ food among other products and services.

“At Tusker Mattresses we have created a robust management structure geared at taking the business to the next level. The team is agile enough to meet the needs of premium and non-premium locations from merchandising to operations perspectives,” said Tusker Mattress Group CEO Dan Githua.

Tuskys, which is expanding into Karen this month, indicated that its new store would offer a differentiated customer experience.

QuickMart has revamped its Kiambu Road outlet to cater to increased demand from residents of the area.

Preferred locations

A report by Cytonn earlier this week indicated that Kiambu Road and Limuru Road were preferred by mall developers, saying the rich neighbourhoods had high purchasing power with investors willing to pay higher rents for retail space.

In January, The Retail Trade Association of Kenya (Retrak) stated that key retailers, particularly those in the supermarket space, have reported good progress on efforts to raise their efficiencies to guarantee prompt supplier settlements.

These include inventory management systems, data sharing with suppliers, and product range reviews.

Retrak indicated that the supermarket sector features 25 key players with indigenous investors enjoying a 98.21 per cent market share. In the last two months such investors — including Tuskys, Naivas, Quickmart, Magunas, Rams, Souk, and Lemigo Kisumu — have successfully managed to expand formal retail value with the opening of more than 10 fully fledged supermarket branches.

The remaining 1.79 per cent was under international players including French retailer Carrefour, Botswana’s Choppies and South Africa’s Game.

Quickmart, started by late businessman John Kinuthia in Nakuru, signalled an expansion plan that includes opening a new branch at Lavington’s Valley Arcade by the end of the year. It is now run by his family, with his son Duncan Kinuthia as managing director.