The retailer says it will not renew the leases for the two low-performing outlets.
Uchumi has been an anchor tenant at Mombasa Road’s Capital Center Mall for over two decades.
The decision to exit the two branches will leave the retailer with 17 branches in Kenya.
Uchumi Supermarkets #ticker:UCHM is set to close its Jipange (Ruaraka) and Capital Centre branches at the end of this month and seek out space at more profitable locations.
The retailer, which is in the market for an equity investor to bail them out, says it will not renew the leases for the two low-performing outlets when they come to an end next Wednesday.
Uchumi has been an anchor tenant at Mombasa Road’s Capital Center Mall for over two decades while the Jipange shop (located along Thika Road) has been operational for over five years.
In recent years, increased competition from its rivals as well as financial difficulties, has seen the two branches record low customer footfall, precipitating the decision to exit the spaces.
“Our move is a consumer and market informed decision that we have incorporated into our strategy to restore Uchumi back to profitability,” Andrew Dixon, Uchumi’s chief operating officer, said in a statement.
“Uchumi is proactively looking at all types of retail space that make the most business sense and give our customers what they need in the most price friendly way possible and at the best value.”
The decision to exit the two branches will leave the retailer with 17 branches in Kenya and comes at a time when rivals Naivas, Tuskys, Carrefour and Quick Mart are expanding.
Heavy debts and stock-outs have left Uchumi’s Kenyan operations in a precarious state and forced it to exit Tanzania and Uganda where is was consistently posting losses.
Uchumi, a publicly listed company, is relying on a Sh3.5 billion from yet-to-be-secured equity investor and Sh3 billion from sale of land in Kasarani, to jumpstart the business.
The retailer recently received a Sh700 million cash injection from the Treasury just before Christmas, which it used to restock its branches in time for the festive season.
“Uchumi has been our partner and we have enjoyed a cordial relationship spanning over 20 years,” Capital Centre’s management said in a statement.
“Though parting ways is difficult, we confirm that we have reached an amicable decision to part ways.”
