Artiste ‘Size 8’ shops at the Uchumi Capital Centre branch along Mombasa Road. PHOTO | SALATON NJAU | NMG 
Summary
- The retailer says it will not renew the leases for the two low-performing outlets.
- Uchumi has been an anchor tenant at Mombasa Road’s Capital Center Mall for over two decades.
- The decision to exit the two branches will leave the retailer with 17 branches in Kenya
Uchumi Supermarkets is set to close its
Jipange (Ruaraka) and Capital Centre branches at the end of this month
and seek out space at more profitable locations.
The
retailer, which is in the market for an equity investor to bail them
out, says it will not renew the leases for the two low-performing
outlets when they come to an end next Wednesday.
Uchumi
has been an anchor tenant at Mombasa Road’s Capital Center Mall for
over two decades while the Jipange shop (located along Thika Road) has
been operational for over five years.
In recent years,
increased competition from its rivals as well as financial difficulties,
has seen the two branches record low customer footfall, precipitating
the decision to exit the spaces.
“Our move is a consumer and market informed decision that we
have incorporated into our strategy to restore Uchumi back to
profitability,” Andrew Dixon, Uchumi’s chief operating officer, said in a
statement.
“Uchumi is proactively looking at all types
of retail space that make the most business sense and give our
customers what they need in the most price friendly way possible and at
the best value.”
The
decision to exit the two branches will leave the retailer with 17
branches in Kenya and comes at a time when rivals Naivas, Tuskys,
Carrefour and Quick Mart are expanding.
Heavy debts and
stock-outs have left Uchumi’s Kenyan operations in a precarious state
and forced it to exit Tanzania and Uganda where is was consistently
posting losses.
Uchumi, a publicly listed company, is
relying on a Sh3.5 billion from yet-to-be-secured equity investor and
Sh3 billion from sale of land in Kasarani, to jumpstart the business.
The
retailer recently received a Sh700 million cash injection from the
Treasury just before Christmas, which it used to restock its branches in
time for the festive season.
“Uchumi has been our
partner and we have enjoyed a cordial relationship spanning over 20
years,” Capital Centre’s management said in a statement.
“Though parting ways is difficult, we confirm that we have reached an amicable decision to part ways.”
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