NAIROBI, KENYA, JAN 26 — The year 2018 has opened on a positive note for the formal retail sector, the Retail Trade Association of Kenya (RETRAK) has said, expressing confidence the quarter will reap big this year.
A market survey released by RETRAK on Friday indicates 2017 was “probably the most difficult for the sector”, as the country witnessed a prolonged electioneering period.
Political tension disrupted trading in major towns across the country, with the private sector reporting losses of up to Ksh700 billion.
RETRAK CEO Wambui Mbarire said the sector is optimistic both the political and economic climate in 2018, will allow for consumer demand and shopping patterns to return to normal levels.
“Following a market review on the operating prospects amongst our membership, we are encouraged to report that the Kenyan formal retail space has opened the year with marked signs of resilience and positive growth,” Mbarire said.
“Distress signs experienced last year are currently under management with clear and positive signs of recovery,” she added.
According to the association, indigenous investors in the local retail sector continue to lead efforts to accelerate and deepen formal retail trade.
The country’s supermarket sector features 25 key players with indigenous investors enjoying a 98.1 per cent market share.
In the last two months, investors including Tuskys, Naivas, Quickmart, Magunas, Rams, Souk and Lemigo Kisumu, have successfully managed to expand formal retail value with the opening of more than ten fully fledged supermarket branches.
Combined, the indigenous investors have facilitated more than Ksh1.2billion economic investments, RETRAK noted, with the recent branch openings in Nairobi, Kiambu, Sagana, Kisumu, Kericho, and Eldoret.
The investments have also afforded the economy more than 600 direct job opportunities, the association says.
“International operators with a market share of 1.79 per cent are also playing a good role complementing the trail blazing efforts by the indigenous investors,” Mbarire noted.
Among latest activities by foreign investors include French retailer Carrefour’s opening of its fourth store in Kenya, at the Junction Mall along Ngong Road.
Botswana retailer Choppies has also opened a store at the new South Field Mall, Embakasi.
Game Discount is set to open its second outlet before the second quarter of 2018 at the WaterFront Mall.
Currently, multinational supermarket sector players have a cumulative six branches.
This year, Kenya will witness the entry of French sports goods retailer Decathlon who are setting up shop at The Hub Karen and Turkish furniture retailer Doğtaş Exclusive who are set to open a shop in Parklands.
Local lifestyle fashion retailer Mavazi, a subsidiary of Tusker Mattresses is also gearing up for further expansion with more stores in Nairobi, Mombasa and Kisumu.
Jade Collections closed the year by opening a branch in Westlands.
The local pharmaceutical retail sub sector is also enjoying good growth with progressive investments.
Goodlife Pharmacy has quickly grown to over 35 stores, with plans to expand its footprint to 100 plus stores over the next five years.
The association has termed the efforts to secure the survival of Nakumatt as “Commendable”.
The cash strapped retailer, once a market leader in Kenya, is under new management after the High Court allowed the appointment of an administrator.
PKF Consulting partner Peter Kahi took over the supermarkets’ management from its founder Atul Shah this week, shielding it from its creditors in the short term as it tries to recover.
“RETRAK fraternity remains optimistic that a mutually satisfying resolution will soon be realised. The recent placement on Administration plus the ongoing restocking of 10 key Nakumatt branches is noteworthy as is the extensive restocking of various Uchumi branches,” Mbarire said.
She said the association’s members, particularly supermarket players have doubled efforts to streamline their operations, with significant Information Technology investments being undertaken to enhance corporate governance.
According to the lobby, key retailers particularly those in the supermarket space have reported good progress on efforts to raise their efficiencies to guarantee prompt supplier settlements.
These include inventory management systems, data sharing with suppliers, and product range reviews.
“Looking ahead, we remain optimistic that the year 2018 will provide a good recovery path for the local retail sector. All indicators confirm that the prospects are bright and our membership remains committed to continue delivery value to facilitate mutual growth,” she said.