Nakumatt supermarket.[Photo/Standard]Kenya’s troubled retail sector crossed to the New Year in a mixture of hope and trepidation.
In spite of the turmoil experienced in the sector last year, some of which is likely to persist in 2018, there was also strong indication that efforts to save it would mature this year.
By the end of last year, three top retailers were facing severe liquidity crises forcing the government to set up a task force to investigate what was ailing the sector.
In Uchumi and Nakumatt, goods had dried up from the shelves, while workers had gone for months without pay.
It was not any different for a fashion retailer, Deacon. As the year came to a close, the retailer which deals in international fashion brands, announced its fourth profit warning which it blamed on reduced sales and closure of some Nakumatt outlets.
In the course of the year, it had also lost Mr. Price brand, one of its most popular franchises. It was also forced to close down outlets to remain afloat. Yet in spite of the turbulence, stories of the two main retail players, Uchumi and Nakumatt had silver linings.
For Uchumi, the year ended with an exit of the company’s chief executive Julius Kipng’etich who shareholders and suppliers had pegged hope of steering the chain to stability. Even as he left, there was a ray of hope for the chain. In December, the government released Sh700 million as part of the bail out funds which helped the chain restock for the festive season.
Another Sh600 million will be released to the firm once restructuring plans have been concluded. But the biggest news from the listed retailer was the announcement that it was on the edge of concluding negotiations with a strategic investor who would inject Sh3 billion capital to steady its liquidity.