Chaos in East Africa’s retail chain store market has created opportunity for Shoprite’s entry

Sighting an opportunity to enter Kenya’s market by filling retail space that has been left empty as competitor’s presence dwindles in the country, South African retailer, Shoprite Holdings looks to expand its coast in East Africa, according to its chief executive Pieter Engelbrecht.

“Five years ago, Kenya wasn’t considered by us because they had three very big retailers there,” however “Starting last year … the retailers in Kenya were in total disarray and we were able to secure seven sites and leases,” Engelbrecht said while speaking on Tuesday at the presentation of the company’s half-year results.

In the previous year, Nakumatt –Kenya’s biggest retailer as a then – battled with suppliers and landlords who demanded the liquidation of assets to recover their monies or rent arrears. Nakumatt had to close more than dozen branches in the Kenya, Uganda and Tanzania as it struggled to pay suppliers and creditors it owes more than 30 billion Kenyan shillings ($289 million).

Nakumatt woes seem to have created an opportunity for Africa’s biggest retailer, as Shoprite takes a turn at the table of companies quest to expand their reach and strengthen their positions in Africa.

Amidst crisis that took hold of South African retailers in 2017, as they struggled to lift earnings at home where increasing household debts squeezed consumer income, Shoprite was able to beat the situation of things with the strategy of focusing on budget-conscious consumers, including more than 10 million South Africans on welfare grants.

Shoprite  plans to be in Kenya before the end of 2018, though the retailer is already registered in the country.

The retailer has penetrated Africa’s biggest economy market Nigeria, as well as that of Angola with the aim to diversify its earnings base. Kenya seem to be the next in line for its conquest.

“We have not changed our focus to say we’re not looking at the continent anymore. We have grabbed that opportunity, we’re going to Kenya” Engelbrecht said.