Uchumi raises stakes with Ruaraka branch expansion

Corporate News

Uchumi’s chief executive officer Jonathan Ciano. PHOTO | FILE 

By MUGAMBI MUTEGI, pmutegi@ke.nationmedia.com

In Summary

• Uchumi says the contractor expanding its Ruaraka branch has already secured regulatory approvals to build a bigger outlet adjacent to its existing Jipange branch.

Uchumi supermarkets has started expansion of its Ruaraka branch, stepping up the top retailers’ turf war along the busy Thika highway which went a notch higher last week when the Garden City Mall opened its doors to customers.

The retail chain says the contractor expanding its Ruaraka branch has already secured regulatory approvals to build a bigger outlet adjacent to its existing Jipange branch.

The expansion will help Kenya’s only listed retailer to fight it out for customers with Nakumatt and South Africa’s Game, which last week opened new stores at the Garden City Mall; as well as Naivas which is located just metres from Uchumi’s branch.

“My expectation is that the contractor will have completed construction in at most 15 months,” said Uchumi’s chief executive officer Jonathan Ciano in an interview on Friday.

He however declined to reveal how big the new branch will be.

“The current Jipange branch will be converted into a business centre. I cannot disclose the exact plans since we are still in the early days and that would also be sharing too much information with the competition,” said Mr Ciano.

READ: Massmart cuts prices for Garden City Mall opening

Uchumi enjoyed a near-monopoly in the area after Nakumatt’s outlet was demolished in 2008 to make way for the modern road but it has in the past two years or so felt the pinch of competition with the opening of the Naivas branch.

Uchumi’s main rivals have opened new branches in swanky large malls, leaving the Jipange branch, which is housed in a much smaller building, at a clear disadvantage.

Naivas has a store at Mountain Mall (Tuskys had initially booked the space) which is just a few metres from the Uchumi store while Nakumatt opened a new store about a kilometer away at the Thika Road Mall (TRM).

Over 50 retail shops opened shop at the new Garden City Mall last week following completion of Phase 1 of the Sh2.3 billion project.

“We are very excited to open our doors and invite everyone to start shopping and to begin growing our Garden City community,” said Actis director Michael Turner in a statement on Monday.

Actis, in partnership with CDC Group (UK’s Development Finance Institution (DFI), built the mall which is billed as the largest in East Africa.
Naivas, Nakumatt and Game have since opening of the mall used discounts on select items to woo customers.

Game’s four-day discount offer on products like television sets, cooking appliances and other electronics ended on Sunday.

Nakumatt is running a two-week discount campaign of its own at the Garden City and TRM

Naivas responded by placing a discount advert of its own in the newspapers with the tagline “bei zetu hazina game”, an apparent reference latest competitor, Game.

Nakumatt and Game have taken the competition a step further by placing a billboard right next to the Naivas outlet, an up-close invitation to customers to visit their new outlets.

It is this rivalry that Uchumi will be hoping that a bigger outlet will enable its fight with the Ruaraka branch upgrade.

“The expansion of the Jipange store does not have anything to do with the new entrants. This expansion was planned for 2010 but some internal issues with the contractor delayed it,” said Mr Ciano.

branches, with some products such as GOtv and select DSTV decoders being sold at half price.