A game store branch. [Photo/reviewsasa.co.ke]

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Kenya’s confectionery market has had stellar growth in the last 10 years on increased demand due to rise in a number of shoppers with high disposable income and emergence of shopping malls in most urban areas.

The growth of local retail outlets and increasing competition from their international counterparts has also created a vibrant market for biscuits, chocolates, and snacks as retail chains scramble to outdo rivals.

It is worth noting that consumers of high-value confectionery products predominantly shop from modern business outlets (hyper-supermarkets) rather than the informal general market (groceries and kiosks) driven by the wide assortment of products from local and foreign manufacturers.

In light of this, at peak, Nakumatt and Uchumi supermarkets operated 46 outlets and 18 outlets nationwide respectively, which accounted for close to 50 percent of the total retail chains in key accounts in the country.

With this reach, the two giant retailers controlled about 35 percent of the confectionery industry in key accounts. However, over the last year, the confectionery industry has faced significant headwinds as the country’s two giant retailers disintegrated over mismanagement and poor payments to suppliers.

Consequently, the reduced operations of these two retail chains characterized by perpetual empty shelves and low shopper traffic have forced shoppers to move to their competitors. We have seen an estimated growth of five percent in confectionery business volume migrate to Carrefour, Tuskys and Naivas supermarkets.

Notwithstanding this migration, however, the decline of Nakumatt and Uchumi has not been compensated by an equal growth in their immediate competitors, which indicates a net contraction in retail business volume in the short term.

The entry of global players like Carrefour and Game bring superior customer service standards, exceptional product variety and quality, value-adding consumer promotions, and a dynamic first-world customer experience.

Local supermarkets are quickly realizing that if they are to stay ahead of the game, it cannot be business as usual. A drastic change in business practices is now more than ever required to thrive in the new retail environment.