South African retailer Shoprite has taken over Mombasa's City Mall space that struggling retailer Nakumatt previously occupied.
Nyali-based City Mall kicked Nakumatt out of the premises in March after the retailer accumulated Sh27.8 million in rent arrears.
Shoprite in February announced that it had secured space in seven prime malls in Kenya including Westgate and Garden City.
The retailer is yet to open the two branches but it plans to start operations before the end of the year.
Shoprite, which operates in Tanzania and Uganda with a strong presence in southern, central and West Africa, entered Kenya after several false starts it blamed on fierce retailer competition three years ago.
The supermarket has taken advantage of the turmoil in Kenya’s retail sector that has left Nakumatt and Uchumi #ticker:UCHM supermarkets struggling with supplier, rent and salary debts as well as stockouts.
“Expansion in Africa continues with a planned entry into Kenya before the end of 2018, where weakened competitor positions have opened a window of opportunity to strengthen the group’s presence in East Africa,” said Shoprite chief executive Pieter Engelbrecht in February as he unveiled plans to start operations in Kenya.
Shoprite is set to compete with retailers such as Naivas and Carrefour as it expands to other malls after signing leases with building owners.
Family-owned Tuskys is currently Kenya’s largest retailer with 6,000 employees in its more than 60 stores and 900 at its seven stores in Uganda.
Naivas, another family-owned store with about 47 branches, is second-largest Kenyan supermarket chain.
Nakumatt was the largest regional retailer with 64 stores in Kenya, Uganda and Rwanda before its rapid financial meltdown.