Shoprite Holdings, the South African retailer has opened its first store in Nairobi and is set to disrupt the Kenyan retail industry which has attracted a number of foreign investors.
The maiden outlet, located at Westgate Shopping Mall sits on a 50,000-square-feet space, previously occupied by struggling Nakumatt Holdings that once was the giant in the space
Fitted out to Shoprite’s premium ‘Checkers’ brand, the new outlet in Kenya, said to be Africa’s number two retail market after South Africa is set to position the international brand at a better competitive edge in retailing.
The firm operates more than 2700 stores in 14 countries outside of South Africa including Uganda and Tanzania, said it is debuting into the country with a promise to offer a diversified product range and consistent value for shoppers.
The company said it will open another outlet at Garden City in early 2019 with plans to open more outlets both in Nairobi and outside the capital city.
Shoprite, which was signed up by Knight Frank Kenya as the anchor tenant for Westgate Shopping Mall in March this year is strengthening its position in East Africa, Kenya being the strongest economy the region.
The company further plans to open three more stores in Kenya next year.
Ben Woodhams, Managing Director at Knight Frank Kenya, said: “We are delighted that Shoprite has chosen to launch in Kenya with the premium Checkers level of fit-out at the Westgate Shopping Mall, and I believe shoppers will be impressed by the quality of this fantastic new store, a real first for Kenya.”
Expansion hampered by competition
Kenyan retail space has proved a difficult landscape for many retailers, with Nakumatt closing down almost all of its retail outlets, remaining with only 6 from 65.
The collapse of the local supermarkets such as the debt-ridden company and state-backed Uchumi Supermarkets Plc has left opportunities for both local and international rivals, who are ramping up operations to garner a lion’s share of the market.
Shoprite’s expansion plan is hampered by competition from especially the French retailer, Carrefour which has moved to boost beverages and grocery sales on Jumia’s online platform.
According to Gerhard Fritz, Shoprite’s head of operations outside South Africa, such competition is driving up rental costs.
“Due to the aggressive expansion of Carrefour there are no cheap sites left behind with the demise of Nakumatt and Uchumi,” he said in an emailed response to questions by Bloomberg.
“We have declined some sites as we feel rentals are too high. Landlords are having a field day playing each off against each other.”