Choppies set to strengthen store network in Kenya

Oct 2, 2017

Choppies Kenya
Choppies Kenya is getting ready to expand its footprint. 22 new branches are planned, despite the current struggle facing the Kenyan retail sector.

After a first foray into the Kenyan retail sector through the acquisition of debt-ridden retailer Ukwala, Botswanan supermarket chain Choppies announced a further store network expansion in Kenya. Although no timeline has been given for the expansion, the retailer announced it would be present in all major Kenyan cities. According to Trendtype’s Retail Database Tracker, Choppies has, at the moment, 11 stores in Kenya, many of which were former Ukwala outlets.

A few months ago, Trendtype had reported that Choppies would start opening its own stores, first by replacing struggling Kenyan retailer Nakumatt as the anchor tenant in the new Kiambu Mall. During an inspection to the new outlet – which was supposed to open to the public last August and was recently pushed to December – Choppies East Africa Executive Director Vijay Kumar elaborated on the retailer’s broader plans in Kenya. Kumar said the total investment would add up to more than KSh2 billion (approximately $19.4 million) and would enable Choppies to open 22 new stores in Kenya.

The investment comes at a particularly tumultuous time for the Kenyan retail sector. The leading domestic retailer, Nakumatt – up to recently one of the leading retailers in East Africa – has been enduring a longstanding debt crisis, with multiple outlet closures, stock disruptions and supplier deals falling through. Last week, in a bid to save the business, Nakumatt announced talks about a possible merger with fellow Kenyan retailer Tuskys. Being the most high profile case, Nakumatt is not alone in its financial problems – Kenyan retailers are struggling across the board, despite data indicating a consistent growth of the sector as found by a recent survey by Procter & Gamble, which concluded retail spending increased by 16% in 2016. This suggests growing international competition could be one of the causes of the pressure felt by local retailers. Asked about the timing for an investment in Kenya, Kumar stated that the current state of the sector rather presented an opportunity for the Botswanan retailer and appeared optimistic in what concerned the near future of the market. Speaking to journalists, Kumar stated Choppies was “seeking to benefit from the crisis currently being witnessed in the retail sector [in Kenya]. Despite the temporary slump, business will no doubt look up in the near future.

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