Nakumatt Lifestyle closure signals exit from Nairobi CBD
The closed Nakumatt Lifestyle branch after National Social Security Fund shut down the store at Hazina Towers in Nairobi over rent arrears. photo | salaton njau | nmg
Nakumatt was given marching orders from the Lifestyle branch on Friday, while the Business Daily has learnt that its Development House outlet on Moi Avenue has already been taken over by a rival retailer.
The only Nakumatt outlet still open in the CBD is the branch located opposite City Hall, which is however characterised by empty shelves and almost zero foot traffic.
Nakumatt has operated six CBD branches at various times including one each on Kimathi and Ronald Ngala streets and Haile Selassie Avenue.
The closure of Nakumatt’s flagship Lifestyle branch has left the retailer holding onto just one outlet in Nairobi’s central business district (CBD), marking yet another low for the financially troubled supermarket chain.
Nakumatt was given marching orders from the Lifestyle branch on Friday, while the Business Daily has learnt that its Development House outlet on Moi Avenue has already been taken over by a rival retailer.
The only Nakumatt outlet still open in the CBD is the branch located opposite City Hall, which is however characterised by empty shelves and almost zero foot traffic. Nakumatt has operated six CBD branches at various times including one each on Kimathi and Ronald Ngala streets and Haile Selassie Avenue.
The National Social Security Fund (NSSF), the owners of Hazina Towers where the Lifestyle store was located, on Friday obtained court orders allowing it to kick out Nakumatt for rent arrears amounting to Sh73 million.
Atul Shah, Nakumatt’s chief executive officer, did not respond to multiple attempts by the Business Daily to reach him for comment on the significance of the retailer’s near exit from the city centre.
Nakumatt, Uchumi, Tuskys, Naivas and Ukwala (which has seen been bought out by Choppies) have for years been battling each other to secure prime locations within the CBD, particularly around bus stops and offices.
This bruising competition, which was replicated across the country, among these retailers saw Nakumatt grow its branch count in the CBD to six in a bid to cash in from working class consumers.
“We’re now satisfied with the five branches we have opened in the CBD,” Mr Shah said in August 2010 when opening the Haile Selassie branch, praising their branches for being strategically located in high customer footfall areas.
This was the same year that the supermarket acquired four branches from Woolmatt for Sh400 million – a pointer to its aggressive expansion strategy and its significant capital war chest to actualise the same.
This allowed it the retailer to take the battle to the doorsteps of major rivals that were until then dominated by Tuskys and Ukwala supermarkets.
Nakumatt opened outlets along Haile Selassie Avenue (opposite Technical University), Moi Avenue (Development House), Monrovia Street (Lifestyle) and along Ronald Ngala. Its Downtown branch no Kimathi Street burned down in 2009. Nakumatt closed its Ronald Ngala and Haile Selassie branches earlier this year, citing low sales, making the recent closures of its Moi Avenue and Lifestyle branches significant.
The City Hall branch, which has not been Nakumatt’s best performer, is now left as the only operational store within the priced Nairobi CBD – marking a disastrous turn of events for a business that was once worth billions of shillings.
Nakumatt’s business has seemingly unravelled this year, as debts running into billions of shillings piled pressure on the retailer, occasioning stockouts as unpaid suppliers pulled out.
Landlords across the country and region, whom Nakumatt allegedly owes tens of millions of shillings in unpaid rent, have continued to evict the retailer from their premises.
