Nakumatt pushes further into Africa. Should Shoprite be worried?

  

Kenya-based supermarket chain Nakumatt on Saturday took another step towards its goal of becoming a Pan-African retailer when it opened its first outlet in Tanzania.

The US$1.3 million branch, situated in the town of Moshi at the foot of Mt. Kilimanjaro, brings Nakumatt’s total number of outlets to 35. According to a company statement, Nakumatt is currently busy with the construction of an additional four supermarkets in Tanzania, located in Arusha and Dar es Salaam.

The company now has a presence in four African countries, namely Kenya, Uganda, Rwanda and Tanzania. An outlet in Burundi is also on the cards. “Nakumatt Holdings is actively exploring options for a store in Burundi to ensure that we fully cover East Africa before setting off on the Nakumatt 2.0 journey, which involves registering a Pan-African presence,” said Atul Shah, managing director of Nakumatt Holdings.

As part of its Nakumatt 2.0 strategy, the retailer is actively looking at potential opportunities in Nigeria, the Democratic Republic of Congo, South Sudan, Malawi and Botswana.

Likely keeping a close eye on Nakumatt’s expansion, are South African retailers Shoprite and Pick n Pay. Shoprite has spread its wings north of South Africa many years ago and is arguably the most successful supermarket chain in sub-Saharan Africa. The company has a presence in 16 countries across the continent. How we made it in Africa earlier reported that in Nigeria alone, Shoprite plans to open 20 outlets over the next two years.

Pick n Pay has recently also boosted its African footprint by announcing new stores in Zambia, Mozambique and Mauritius. Pick n Pay has in the past been accused of being too slow to move into the rest of the continent.

Judging by his recent comments on South Africa’s Moneyweb radio show, Shoprite CEO Whitey Basson won’t be too fazed by Nakumatt’s Pan-African ambitions. Speaking about Walmart’s recent entry into the continent, Basson said: “Shoprite is used to competition. We have lots of competition, we have smart competition. If you take the Pick n Pay Group with Mr Ackerman at the helm – when I started 30 years ago he was probably one of the smartest guys in South Africa. So Walmart is really no bigger threat than what Pick n Pay was at the stage when we started, and we managed to keep ahead of times on that one. So Walmart is just part of the global retailing market; it doesn’t mean because you are big that you are necessarily very profitable and efficient. We’ve seen some of the biggest European retailers now in problems maintaining profitability with all their resources and all their size. So it’s a function of how much in love you are with retailing.”



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