Local supermarket chain Tuskys is piloting its first franchise branch in a Nairobi estate with an eye on expanding the model in the region as Kenya’s top retailer embarks on its latest strategy to dominate the sector.
Tuskys chief executive Dan Githua told the Business Daily in an interview that the company has set out a plan that would see it execute several growth strategies that include franchising and consolidation with smaller retailers by 2024.
The plan includes partnering with local investors who will use the Tuskys brand name as well as setting up smaller stores in Kenya and Uganda where it currently has seven outlets and merging with smaller outlets to accelerate growth.
Mr Githua said the firm’s deal with oil marketer Vivo Energy also enables it to open up more express outlets at Shell petrol stations across the region more aggressively.
“We will roll out a lot of stores, especially smaller format outlets on franchise model across the East African region and it is going to happen at the same time. We have two branches being tested locally and in this case, we are allowing our partners to use the Tuskys brand, IT, human resource and supplier management systems among our other resources,” said Mr Githua.
“The small retailers are also improving and we see a lot of opportunity for consolidation and aggregation in the retail industry. Data available shows that we still have an opportunity to have three times more the number of supermarkets in Kenya.”
Tuskys has also embarked on exploring the e-commerce space after recently unveiling an online portal to grow digital revenue streams.
The online platform hopes to leverage the supermarket’s four million customers to drive up sales, as it anticipates that e-commerce will account for 20 percent of Tuskys’ total revenues in the next two years.
The shift towards e-commerce brings competition to the doorsteps of online shopping sites such as Jumia, Kilimall and Safaricom’s Masoko.
Tuskys aggressive expansion comes on the back of the near-collapse of market leaders Nakumatt and Uchumi supermarkets under the weight of debt, creating a gap that Kenyan and foreign retailers have rushed to fill.
Another local retail chain, Ukwala Supermarkets, applied in court for a permanent closure of its business.