The Retail Trade Association of Kenya (RETRAK) has confirmed that the year 2018 has opened on a positive note for the formal retail sector. From its assessment, the Year 2017 was probably the most difficult for the sector and it is hoped that both the political and economic climate in 2018 will allow for consumer demand and shopping patterns to return to normal levels. Overall, we estimate that billions of shillings were lost due to trading disruptions during the electoral cycle and customer apprehension.
Commenting on its market review on the operating prospects amongst its membership, the Retail Trade Association of Kenya (RETRAK) chief executive Wambui Mbarire reported that;
- The Kenyan formal retail space has opened the year with marked signs of resilience and positive growth. Distress signs experienced last year are currently under management with clear and positive signs of recovery.
- Indigenous investors in the local retail sector continue to lead efforts to accelerate and deepen formal retail trade. Our internal research confirms that the supermarket sector features 25 key players with indigenous investors enjoying a 98.1% market share. In the last two months, such 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 Kshs 1.2billion economic investments 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.
- International operators with a market share of 1.79% are also playing a good role complementing the trail blazing efforts by the indigenous investors. French retailer Carrefour, has opened its 4th store in Kenya at the Junction Mall as has Botswana retailer, Choppies at the new South Field Mall, Embakasi. Game Discount is also 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, we shall also be welcoming 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+ stores over the next five years.
- Commendable legal and related efforts to secure the survival of Nakumatt Holdings (in Administration) are still underway and the RETRAK fraternity remains optimistic that a mutually satisfying resolution will soon be realised. The recent placement of Nakumatt on Administration plus the ongoing restocking of 10 key Nakumatt branches, is noteworthy as is the extensive restocking of various Uchumi branches.
- RETRAK members, particularly Supermarket players have also doubled efforts to streamline their operations. Significant Information Technology investments have been undertaken to enhance corporate governance. 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, Wambui Mbarire remains 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.”