- Posted by: Julien Garcier
- Categories: Kenya, SagaRetail, Supermarkets, Tanzania, Uganda
Carrefour franchisee Majid Al Futtaim (MAF) opened its first supermarket in Uganda during December and is due to enter the Tanzanian market in the very near future. The Ugandan store is located in Kampala’s Oasis Mall and has a sales area of 2,800m2. This mall formerly hosted Kenyan chain Nakumatt.
Its first Tanzanian outlet will be located in the Palm Village Mall at in Dar es Salaam. This mall opened in early December. Maina Njuguna of Ivory Tower, the developer of the 100,000m2 mixed-use facility (which includes a hotel and 180 apartments), described it as a “soft opening” (given that its anchor tenant has yet to open its doors) and claimed that 95% of the mall’s retail space had been leased.
There may soon be a second Carrefour outlet in the city, with Botswanan retailer Choppies confirming that it is in talks to sell to sell its sole store there, which ceased trading earlier this year, to MAF. With Choppies also in the process of exiting the Kenyan market, MAF now has the perfect opportunity to open the first Kenyan Carrefour outside of Nairobi.
Meanwhile, Kenyan supermarket chain Nakumatt has finally given up the ghost. Having been in administration for almost two years as it unsuccessfully sought to reach an agreement with creditors, it has now handed over its six remaining outlets to rival Naivas. “They have simply made a strategic exit, with Naivas picking up the branches at a consideration. A bank has also put up its Mombasa Road head office for sale,” an unnamed source told the Daily Nation newspaper.
The Sagaci Research View: Nakumatt’s demise will come as a surprise to no one, as it has been a dead man walking for several years. But with Naivas, Tuskys, Shoprite, Chandarana Foodplus, Quickmart, and Massmart all opening new stores in Kenya during the second half of 2019, the gap it left in the market has swiftly been filled.
With its new stores in Tanzania and Uganda, Carrefour is helping to fill the gap left by Nakumatt in the wider East African market. However, MAF continues to focus on supermarkets and hypermarkets based in malls, largely ignoring residential areas and smaller urban centres. It needs to re-evaluate both its growth strategy and store formats and perhaps take a leaf out of its West African counterpart, CFAO, which is in the process of rolling out Carrefour’s cash and carry Supeco banner in Senegal, Côte d’Ivoire, and Cameroon.
Do you want a comprehensive analysis of Carrefour’s operations in Africa? Then check out our Carrefour Retailer Research Report 2019
To read more about the demise of Nakumatt, once the largest retailer in East Africa, download our free Research Note