Uchumi begins testing new franchising model

Uchumi begins testing new franchising model

The new business model, if successful, is likely to trigger a chain of reactions by other giant retailers, according to analysts as it will lead to a scramble for the majority low-end shoppers who mainly depend on the largely informal retail industry.

At least two stores running under the brand name Uchumi Xpress are already in operation, with more set to be rolled out.

One is located in the middle of Nairobi’s Mwiki estate in Kasarani area where it is competing for shoppers with local shops.

Uchumi Supermarkets has begun testing a new franchising model ahead of a roll-out later in the year that is expected to offer private and mostly small supermarkets the opportunity to trade under its brand name as it seeks to spring back to profitability.

The new business model, if successful, is likely to trigger a chain of reactions by other giant retailers, according to analysts, as it will lead to a scramble for the majority low-end shoppers who mainly depend on the largely informal retail industry.

At least two stores running under the brand name Uchumi Xpress are already in operation, with more set to be rolled out.

One is located in the middle of Nairobi’s Mwiki estate in Kasarani, where it is competing for shoppers with local shops. The Nation found curious shoppers streaming in, signalling interesting times ahead.

Uchumi chief executive Julius Kipng’etich is, however, tight-lipped about these developments.

“We haven’t rolled out the franchises yet. We will be ready to talk about this in a couple of weeks so it would be too early to shout about it. At the moment we are setting up and testing the systems,” he said.

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