Nakumatt Supermarkets has announced that it will shut down more branches in Kenya and Uganda beginning this month, less than two month it closed its Ronald Ngala branch in Nairobi
The first two to be closed in Nairobi will be the one located at the Kenyatta University Plaza and Haile Selassie Avenue, a move that will leave clients in Nairobi Central Business (CBD) with less than four branches- Moi Avenue, City Hall Way and Nakumatt Lifestyle.
“The branch culling strategy will start off with sub-optimally performing branches for whose leases contracts are due for renewal to be followed by branches in poor locations,” said Atul Shah, Nakumatt Managing Director.
A part from cutting down on number of stores, the regional retailer which is facing the toughest financial crisis in its history, is planning to sell a 25 per cent stake to a strategic investor for Sh7.5 billion in a bid to offload its biting debts.
Other cost cutting measures includes reducing its store keeping unit by delisting slow-moving products.
Additionally, the supermarket has shut down one of its two warehouses (where it stores imported goods as well as furniture and electronics) along Mombasa Road.
According to a South African rating agency GCR, Nakumatt’s gross debt has more than tripled in as many years to Sh15 billion in the period to February 2015 from Sh4.2 billion in 2011.
The move by Nakumatt is set to render hundreds of workers across the value chain jobless, further widening the country’s unemployment gap.
Kenya holds the dubious distinction of having the region’s highest unemployment rate, this according to the latest assessment of human development report by UN
The 2017 Human Development Index (HDI) shows that Kenya’s rate of unemployment is now equal to that of neighboring Ethiopia and Rwanda combined