Uchumi mulls over closure of underperforming branches

An attendant at an Uchumi Supermarket branch in Kampala. The Kenyan retailer could shut down some of its underperforming branches resulting in job losses as it restructures its business. PHOTO | FILE  

By SIMON CIURI, sciuri@ke.nationmedia.com

In Summary

• The reorganisation is expected to turn around the struggling retailer that has fallen behind on its payments to suppliers.

Uchumi supermarkets could shut down some of its underperforming branches resulting in job losses as it restructures its business.

Board chairman Khadija Mire said an audit to assess performance of all branches was already underway and would be complete in two weeks. Uchumi currently has 40 branches and 4,500 employees spread across the region.

“The focus will be on performance, location and the management,” said Ms Mire in an interview.

The Nairobi Securities Exchange-listed retail chain last week sacked its chief executive Jonathan Ciano alongside chief finance officer Chadwick Omondi Okumu for what the board termed as gross misconduct and negligence.

The reorganisation is expected to turn around the struggling retailer that has fallen behind on its payments to suppliers. Its stores are said to be performing poorly due to low staff morale and absence of basic goods from its shelves.

“We have not yet identified the outlets that will be affected in our new market strategy but the recommendation from the audit will be out in the next three weeks,” said Ms Mire.

The retailer last year closed one of its outlets in Uganda citing poor location that was negatively affecting its sales volumes.

Most Uchumi outlets have not been renovated for many years giving rival retailers an upper hand in attracting customers. These competitors are located in new malls and have spent heavily on branding and acquisitions.

READ: Things fall apart for regional retailer Uchumi

“We are aware that Uchumi is more disadvantaged compared to other supermarkets given that most of our outlets have not being renovated in a long time. That is one of the areas we are concerned about because appearance is one of the preferences that most shoppers are keen on,” said Ms Mire.

On Friday the board appointed financial consultancy Deloitte to headhunt a new CEO.

“The chief executive officer will have overall strategic responsibility for Uchumi Supermarkets staff, programmes, expansion and execution of its mission,” said Uchumi in the Friday notice.

“The new CEO will be required to have a Masters degree in business or an operations related field with at least 10 years experience at an executive management level within the retail supermarket industry or fast moving consumer goods sector,” added the statement.

Also advertised are the positions of chief operations officer and head of treasury. Applicants have until July 3 to send in their papers.

Uchumi’s board members also met with suppliers on Friday morning to agree on how the supermarket will settle its debt said to stand at Sh1 billion.