Kenyan supermarket boss dismisses Wal-Mart threat

Nakumatt Holdings is one of east Africa’s leading supermarket chains with 36 branches across the region. How we made it in Africa’s Dinfin Mulupi chats with Atul Shah, managing director of Nakumatt, on the firm’s expansion plans, competition and its future.

Atul Shah

Nakumatt has announced plans to expand into south and west African countries. When can we expect this to happen?

As part of our Nakumatt 2.0 business development strategy, we are now weighing our options as we prepare to expand our services beyond east Africa. Our strategy covers a pan-African expansion programme. We are currently undertaking feasibility studies in various north, south and central African countries where we have received a market invitation. Once concluded, these feasibility studies will guide our entry into these markets as we hope to make our first pan-African entry by the year 2015.

It was reported last year that Nakumatt would be selling equity to investors. Give us an update on this?

Yes, this is still an outstanding pledge to share our success with our customers. Beyond offering share options to strategic investors, we also plan to reserve some shares for our members of staff who will be entitled to employee share ownership options alongside our loyal customers. This we may manage to undertake through an IPO, ideally by cross-listing across the bourses in Kenya, Rwanda, Tanzania and Uganda.

Do you see Wal-Mart’s recent entry into Africa as a threat?

Not at all. As a progressive company we actually encourage local and international competition. We are very much confident that we have learnt a lot about retail in this market and we are well equipped to thrive even if the global players were to enter this market. We have a wealth of experience to guide us through and remain confident that we would emerge as the preferred option.

What about competition from South Africa’s Shoprite, which has a presence in most markets you are planning to enter?

Very worthy competitors for whom we accord the necessary respect.

How did the poor economic environment in 2011 affect your operations? What are your projections for the rest of 2012?

Yes, 2011 was marked by a depressed economic environment. We however managed to wade through the challenges by formulating dynamic solutions to adapt to the market conditions. All through our market innovation has helped us to survive through the darkest periods.

For 2012, we shall remain focused on raising our customer delivery levels. We are going back to the drawing board to ensure that we reconnect with our customers and ensure that even as we grow bigger, we continue delivering on their needs. We cannot afford to be complacent or rest on our laurels on the back of regional expansion.

Nakumatt was recently named as one of the world’s foremost family businesses. What are the secrets to this? Any advice for people running family businesses?

Our secret has simply been to maintain our strong family values instilled by our late father. Family values alongside spiritual grounding are very important elements in business management. From where I sit, I consider myself to be part of a 5,500 strong family. My colleagues are not staffers but my brothers and sisters. We jointly share in the success or failure of this business and they actually lead the way. As a manager, you cannot be at all 36 locations in east Africa. My brothers and sisters are, however, the front leaders and team champions on the ground.

Beyond being a family business, we have managed to seamlessly make a transition from a traditional family business to a modern corporate organisation. This simply means that we maintain contemporary business management practices and technologies.

What, in your opinion, is the reason behind the success of Asian entrepreneurs in east Africa?

Pardon me but I am a firm believer that so-called Asian success is slightly stereotypical. Across east Africa I can count more African success stories than Asian. However, such success stories are ignored and rarely highlighted in the media.

In my view, the only Asian success factor in business is personal and family discipline. This is a virtue that is, however, not unique to Asians and one that all individuals must seek to inculcate amongst themselves on all social and even political fronts.

Any management tips for CEOs in these tough economic times?

Yes, tough economic times are meant to test your resilience. Economic challenges cut across the entrepreneurs and the customers thus CEOs must remain sensitive to the plight of the customers. Seeking win-win solutions to economic challenges is a better solution than constantly relying on price increases.