Supermarket chains Naivas and Quickmart are expected to square off for the title of ‘Kenya’s top retailer’ as they maintain steady expansion strategies.
While the pair may not necessarily be new kids on the block, both entities will be seeking to take the throne from the likes of Uchumi, Nakumatt and Tuskys who topped the retail food chain in yesteryear’s.
At present, Naivas holds the edge with 75 branches with Quickmart sitting in second place with 45 branches.
Coincidentally, the two rivals share a common backgrounds having been founded in Kenya’s unofficial retail capital-Nakuru.
Quickmart which marked its 15th year of operations last week now seeks to close the gap to Naivas as it eyes 75 stores over the next five years.
To beat its now arch rival, Quickmart seeks to stick close to its strategy of being the store next door.
“Our strategy in the short to medium term is to grow locally and become the leading retailer,” said Quickmart Marketing Manager Betty Wamaitha.
“There remains pockets of undeserved markets within the country. We have tried to be close to the customer as is possible and to be conveniently accessed. We will be reviewing this strategy to inform our expansion.”
Quickmart has largely stayed out of malls and other large commercial hubs to favor standalone outlets next to residential units.
A crown of thorns
Like in the TV series Game of Thrones, top honors in Kenya’s retail industry has had a short expiry date.
From Uchumi to the defunct Nakumatt and most recently Tuskys, sitters of the throne have ended with daggers to the throne driven largely by heavy debts and gross mismanagement.
The reigns of Nakumatt and Tuskys which at their heights had 64 and 65 branches respectively largely ended with a whimper despite their sheer sizes while on top.
Both Naivas and Quickmart will be seeking to avoid similar pitfalls as their predecessors even as questions persist on whether they are themselves mere pretenders to the throne.
The rapid expansion of both retailers has for instance raised curiosity on their longevity and sustainability.
While the management of Quickmart refused to be drawn to the discussion, Naivas has preciously acknowledged both opportunities and risk posed by size.
Its Chief Operating Officer Willy Kimani has warned of the sector’s thin margins in the past but acknowledges the economies of scale that come with a greater network/footprint.
On paper, larger businesses have always had more cost savings from their ability to negotiate for lower prices through bulk purchases.
As an example, a shop in your neighborhood with always feature greater prices for the same commodities than a supermarket located further from home.
Moreover, slow moving goods in one branch can easily be moved to a second branch with a higher turnover.
Despite the featured economies of scale, Uchumi, Nakumatt and Tuskys have slacked into the background with their peril now haunting remnant players.
Size matters
Nevertheless, size remains an integral feature of retail across the globe with the world’s most successful chains keeping their muscles flexed.
The US Walmart for instance has over 10,000 stores with about half of the outlets located in the United States.
The chain has presence in five continents including Africa, South America, Asia and Europe.
90 per cent of the US population live within 10 miles of a Walmart, a feature rubber-stamping the retailer’s sheer size and scale.
Closer home, Massmart Holdings, a subsidiary of Walmart and the owners of the Game branded stores has 413 stores while Shoprite has over 500 stores across Southern Africa.
Behind, Naivas and Quickmart, Carrefour and Chandarana Foodplus are lining up their own growth strategies.
Carrefour which currently features 16 stores in Nairobi, Kisumu and Mombasa has thrived by picking up prime spaces left behind by Nakumatt and the ailing Tuskys.
Chandarana Foodplus has steadily grown to 21 stores while Cleanshelf, a distant contender has 12 stores.
Carrefour is the only left foreign retailer following the exits of Choppies, Shoprite and the Game who at their height had 15, four and three stores respectively.
Credit: Source link