NAIROBI (Xinhua) --
Foreign supermarkets in Kenya have taken over the
high-end market after troubled Kenyan retailers closed their
branches at various exclusive malls.
completed the “coup” last week after French retailer Carrefour
took up space at Sarit Centre in Westlands, an expat district,
surrendered by financially troubled supermarket Uchumi.
Uchumi, a home-grown
retailer, had occupied space at the mall for over 20 years
serving high income customers that included diplomats and
Kenyans of high-ranking.
The branch is the
fifth to be opened by the France-based supermarket targeting
high income earners in upper income residential areas.
branches at The Hub in Karen, Two Rivers Mall along Limuru Road,
Thika Road Mall along Thika Superhighway and the Junction Mall
along Ngong Road, all which are areas in the capital Nairobi
where the high and middle-income earners flock.
The other foreign
retailers in the East African nation are South African
supermarkets the Game, and Shoprite and Zimbabwean Choppies.
Shoprite has taken
space at Garden City and Westgate malls, which Nakumatt once
occupied for several years.
On the other hand,
the Game is also housed at Garden City and at the Waterfront
Mall in Karen, an exclusive suburb.
Carrefour and Game target high income earners, Choppies is
fighting it out with local retailers that include Tuskys (the
biggest with 64 branches), Naivas and Eastmatt for the middle
and lower segment markets.
Prices of goods at
the high-end supermarkets are usually higher than those at the
other levels as this is a niche market, where shoppers look for
among other things quality and class.
Analysts noted that
the fact that the foreigners have taken over the highly
lucrative market and continue to expand illustrates a
activities by retailers indicate a healthy retail sector, which
is supported by positive demographics evidenced by high
population growth rate of 2.6 percent against global average of
1.2 percent that has led to sustained demand,” Cytonn, a
Nairobi-based investment firm, said in a note Monday.
“Rapid growth of
infrastructure making more areas accessible to investors and
Kenya’s growing position as a regional and continental hub hence
witnessing an increase in multinationals operating in the
county, and e-commerce as seen through the increased
digitization of cash systems and a rise in mobile money and
access to internet, have also boosted East African nation’s
retail sector,” said Cytonn.
Ernest Manuyo, a
business management lecturer in Nairobi, noted that having lost
the niche high-end market, Kenyan local retailers may find it
hard to reclaim it.
He added that the
local chains must institute better financial and supply chain
management processes, and strong corporate governance frameworks
to evade troubles Nakumatt and Uchumi are struggling with.