Nakumatt fall offers key lessons on brand survival after success

The closure of Nakumatt’s last six stores in the recent past was the last nail on the coffin to Kenya’s favourite supermarket chain. The closure was also the end of last-ditch efforts to flog the dying giant horse that had been in the Kenyan market for over the past 30 years.

In its peak days, the brand enjoyed a high level of brand loyalty some companies can only dream about. From the branding to the customer service, the brand lived true to its mantra, you need it, we’ve got it and went on to become a giant in the East Africa retail chain. The supermarket laid claim to over 60 outlets scattered across the East African market while employing a whopping 5,500 permanent employees.

Real estate developers allocated their best mall spaces to the brand. This greatly helped put Nakumatt’s expansion plans in motion, seeing it open branch after branch in prime locations to the satisfaction of their ever-growing clientele.

Ever since the troubles became public, Kenyans watched and remained hopeful that the fortunes would turn around but ever since, store, after store has closed down as the struggle to remain afloat, became too overwhelming. Eventually, it has drowned, selling the last six remaining stores to its rival, Naivas Supermarket.

Thousands of SMEs die in Kenya each year and a closer look at Nakumatt’s disheartening closure reminds us that even the big entities can also fail as winds of disruption are always ever blowing. Other examples of big brands that failed include Kodak and Blockbuster among others that were all global entities.

A look at the original Fortune 500 companies in 1955 shows that only 52 of them exist today. In other words, fewer than 12 percent of the Fortune 500 companies included in 1955 are still on the list 64 years later in 2019.

88 percent of the companies from the original list have either gone bankrupt, merged with or acquired by other firms, or they still exist but have fallen from the top Fortune 500 companies. This is a true testament that disruption remains true and alive and Nakumatt is not isolated.

The case on Nakumatt and the failure of the fortune 500 companies are identical and show brands that were once at their prime but came tumbling down. Our only option is to learn from them of the issues that bring a company down. We beg to ask, after all their success and market leadership, what eventually undermined their performance?

At face value, the quick, gruesome downfalls have been attributed to various factors, including lack of innovation, lack incompetent management, poorly executed expansion plans and too much debt mismanagement.

However, a scratch beneath the surface proves that all these companies have failed because of poor leadership. Leadership is at the core of any success or failure of an organisation because every decision or stride is defined by the leadership style and priority.

Studies show that companies that focus on developing the Leadership potential of individuals and promoting the right behaviours, by bringing about a change in thinking when it comes to their Leadership are what creates a winning team culture. When it comes to Leadership, individuals need to have a hunger to want to grow themselves and this is largely assisted by having a winning team culture that drives people to want to be the best version of themselves.