In the last months Nakumatt, the leading supermarket chain in East Africa with 66 supermarkets at its peak, has entered in a situation of operational and financial distress that threatens the very survival of the chain. The troubles that Nakumatt is going through have brought back to the public attention the challenges that local modern chains in East Africa face, which have been exacerbated with the arrival of new international competitors.
Based on our experience in the retail landscape in East Africa, we have identified the five main reasons why local modern retailers are currently struggling in East Africa. All of them are essentially internal to the players, and converge in the need of the modern retail sector to reinforce processes, data-based decision making and capital structures, in order to be able to capture the next wave of growth of the market.
