The last three remaining stores of Nakumatt Uganda were closed by the Ugandan Revenue Authority, following unpaid taxes of more than Sh300 million.
The Ugandan Revenue Authority (URA) shut down the last Nakumatt branches in the country. According to URA officials, the struggling Kenyan supermarket chain had unpaid taxes adding up to over Sh300 million ($83,220). Negotiations between Nakumatt’s representatives and the authorities enabled the supermarket to make partial payments and salvage its operation. However, Nakumatt’s failure to make any payments inevitably led to the closure of the last three remaining branches. Nakumatt Uganda could still reopen if the taxes in debt are paid.
According to Trendtype’s Retail Database Tracker, Nakumatt opened its first outlet in Uganda in 2009 and introduced the first 24-hour supermarket in Uganda. At the peak of its operation in Uganda, Nakumatt had nine branches in the country.
These branches have all closed in the past year as the retailer has struggled with great financial problems, some of which related to its aggressive expansion outside Kenya. At the moment, lawsuits from suppliers and landlords are estimated to total more than Sh5.2 billion.
Since its cash flow problems have become acute, the Kenyan retailer has been forced to severely cut back its operation. Nakumatt is a family-owned business. It has been trying for a year to find a much needed investor. Investors have been repeatedly announced but no actual deals have come to materialize.
In the wake of the closure of the last remaining Ugandan branches, CEO Atul Shah has insisted a suitable investor and capital injection will soon appear. Shah expects Nakumatt to recover and resume its Ugandan operations soon after any investment. The last branches to close in Uganda were the Bugolobi outlet and the main store in the Oasis Building, in Kampala.
In a further twist, it was also revealed that Shoprite would take over Nakumatt’s store in Acacia Mall, Kampala. Nakumatt had previously taken over Shoprite’s stores in Kenya and Tanzania when it exited.
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