Urban population growth, improved infrastructure credited for expansion of retail chains

October 22, 2019 (4 weeks ago)
Continued changes in tastes and preferences by the growing middleclass is also pushing growth of retail chains, as well as improving infrastructure that has propelled growth of malls in the country/FILE

, NAIROBI, Kenya, Oct 22 – The continued expansion of retail chains in the country is supported by a variety of factors, among them the expansion of urban population, which is currently at 4.3 percent, compared to a global average of 2 percent.

A finding by Cytonn Investments says that continued changes in tastes and preferences by the growing middleclass is also pushing growth of retail chains, as well as improving infrastructure that has propelled growth of malls in the country.

Additionally, availability of relatively low-priced retail spaces especially satellite towns has also been identified as a contributing factor.

This finding comes at a time when Naivas supermarket has announced it is opening 4 additional branches, to bring the total number of its outlets to 59.

The additional branches will be situated in Mombasa, Embu, near Yaya Centre and along the Eastern Bypass.

The move is in line with the retailer’s expansion strategy aimed at tapping into Nairobi outskirts and urban cities.

“Our target is to serve each County head quarter but as of now, we have a pipeline that will ensure we also tap into rapidly urbanizing areas such as Ngong, Kitengela, Ongata Rongai and Machakos,” said Naivas Chief Operating Officer, Willy Kimani.

This comes in the wake of increased competition from international retailers such as Carrefour and Shoprite, and local players among them Tuskys and Quickmart.

In September, Quickmart announced it was merging with Tumaini Supermarket to form a stronger brand that would take on industrial competitors.

“Quick Mart and Tumaini Self Service announce that their respective board of directors have authorised the commencement of a merger and business integration of the two companies. This follows the approval by the Competition Authority of Kenya on August 26,” a joint statement issued by Quick Mart managing director Duncan Kinuthia and his Tumaini counterpart Moses Nditika said. Under the deal, Tumaini supermarkets will now trade under the brand name Quick Mart.

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