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Supermarkets in turmoil as heavy debt load weighs

Uchumi Supermarkets Koinange Street branch in Nairobi. PHOTO | FILE
Uchumi Supermarkets Koinange Street branch in Nairobi. PHOTO | FILE 

Retailers in the Kenyan market are facing strong headwinds related to high operating costs, mounting supplier dues, and margin pressures that have pushed two retailers to the red.
The current suppliers’ disquiet at Nakumatt and loss-making position of Uchumi and Ukwala reveal a retail industry in turmoil.

Troubled Uchumi had to battle a winding-up suit early this year, triggered by mounting suppliers’ dues amounting to Sh3.6 billion.

The Nairobi bourse-listed retailer reported an after-tax loss of Sh3.4 billion in the year to June 2015 following a decline in revenue coupled with impairments for “cooked books.”

Choppies-owned Ukwala Supermarkets has also reported a net loss of Sh270.1 million in the year to June, the first time investors are getting a peek into the tier II retailer’s financials.