Tuskys Supermarket on Kenyatta Avenue in Nairobi. PHOTO | EVANS HABIL
Local supermarket chain Tuskys is piloting its first franchise
branch in Nairobi’s Buru Buru Estate with an eye on expanding the model
in the region as Kenya’s top retailer embarks on its latest
strategy to dominate the sector.
strategy to dominate the sector.
Tuskys chief executive Dan Githua
told the Business Daily in an interview that the company has set out a
plan that would see it execute several growth strategies that include
franchising and consolidation with smaller retailers by 2024.
The
plan includes partnering with local investors who will use the Tuskys
brand name as well as setting up smaller stores in Kenya and Uganda
where it currently has seven outlets and merging with smaller outlets to
accelerate growth.
Mr Githua said the firm’s deal with
oil marketer Vivo Energy also enables it to open up more express
outlets at Shell petrol stations across the region more aggressively.
“We
will roll out a lot of stores, especially smaller format outlets on
franchise model across the East African region and it is going to happen
at the same time. We have two branches being tested locally and in this
case, we are allowing our partners to use the Tuskys brand, IT, human
resource and supplier management systems among our other resources,”
said Mr Githua.
“The small retailers are also improving and we see a lot of
opportunity for consolidation and aggregation in the retail industry.
Data available shows that we still have an opportunity to have three
times more the number of supermarkets in Kenya.”
Tuskys
has also embarked on exploring the e-commerce space after recently
unveiling an online portal to grow digital revenue streams.
The
online platform hopes to leverage the supermarket’s four million
customers to drive up sales, as it anticipates that e-commerce will
account for 20 percent of Tuskys’ total revenues in the next two years.
The
shift towards e-commerce brings competition to the doorsteps of online
shopping sites such as Jumia, Kilimall and Safaricom’s Masoko.
Tuskys
aggressive expansion comes on the back of the near-collapse of market
leaders Nakumatt and Uchumi supermarkets under the weight of debt,
creating a gap that Kenyan and foreign retailers have rushed to fill.
Another local retail chain, Ukwala Supermarkets, applied in court for a permanent closure of its business.
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