Uchumi bets on mini marts in recovery plan

Uchumi Supermarkets is set to focus on mini marts in a new business strategy aimed at improving its efficiency.

After years of playing catch up with its rivals in big shopping outlets, the 40 year old retailer believes there’s a huge untapped market dedicated to residential and high foot traffic areas.

The retail chain, which has also been undergoing financial difficulties, will use the small branded shops to stock low-volume packed items targeted at the micro-market as it seeks to regain its market footprints.

According to Uchumi Chief Executive Officer Julius Kipng’etich, the move is aimed at keeping pace with the changing dynamics in the retail market.

“Not everybody goes to the shopping mall. That’s one weakness that the market has made an assumption on. We have to find a model that takes us closer to the wananchi,” Mr Kipn’getich said.

The formal retail industry only accounts for 14 percent market, leaving a huge opportunity for retailers to focus on the mass market.

Competition in the retail space has also intensified with the entry of global chains such as The Game and Carrefour all angling for a share of the market.

By going small, Uchumi hopes to position itself as the go to store. The 40 year old retailer has signed a new deal with its suppliers to own the stock in the stores and receive payments once sold.

“The new arrangement will be partnerships, where we will brand and supply goods through the mini shops, and it won’t require any significant financial input with the consignment model, where the goods belong to the supplier until they are sold,” Mr Kipng’etich added.

The CEO further said the new expansion plan is designed to be cost-effective and capable of making returns for the shareholders.

Uchumi seemingly came out of the crosshair of its suppliers, after a section of them agreed to drop a wind up petition the last hurdle in its recovery plan.

The liquidation suit out of the way, Uchumi has been reaching out to its bankers for credit lines to facilitate payments to suppliers.

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uchumi Julius Kipng'etich Competition the game mini marts retail market

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