Turmoil engulfs Kenya’s supermarket success Nakumatt
NAIROBI: The butcher is closed, metres of shelves are empty save for a single brand of shampoo and, worst of all, the toilet paper is out- of-stock.
Once a Kenyan success story, homegrown Nakumatt supermarkets are grappling with product shortages so severe even the country’s best-known cartoonist has taken notice, lampooning the company’s slogan in a recent drawing as, “You need it, we don’t have it”.
The dizzying fall of East Africa’s largest retailer has been blamed on a combination of bad management, misguided expansion plans and increased competition, and many industry insiders say the damage wrought on the company is so severe that it may not survive.
“It’s what I call a perfect storm, where a series of events have come together to create the position that we’re in,” said Andrew Dixon, a former executive with Britain’s Tesco supermarket recently hired to head up Nakumatt’s marketing.
The chain’s position today is indeed a tenuous one: Nakumatt has become so bad at paying its bills that some suppliers demand to be paid upfront or refuse to deliver.
The landlord of one supermarket recently raided the premises and seized merchandise in lieu of unpaid rent. It wasn’t always like this. Nakumatt’s transformation from a one-store mattress retailer into a region-spanning grocery empire is a fairy-tale saga in a country where entrepreneurship is a cardinal virtue.
The chain’s story starts in 1979 in Kenya’s Indian community, when a father, fresh off of the bankruptcy of another business, started a mattress store with his two sons in the Rift Valley town of Nakuru.