Uchumi closes 24th branch in three years

Uchumi closes 24th branch in three years

Uchumi Supermarkets’ closure of its prime Sarit Centre store has seen the retailer’s branch count drop by two thirds to 16 in just three years, reflecting its dwindling fortunes.

The struggling retailer, which has operated the Sarit store for over three decades, said it resorted to shutting it down as part its cost-cutting and restructuring strategy.

In 2015, following aggressive expansion regionally, the publicly-listed retail chain operated about 40 branches in Tanzania, Kenya and Uganda.

Uchumi, which is saddled with debt, soon thereafter exited these regional markets following sustained losses and extended the branch closures to Kenya. “We will be exploring possible relocation at other venues for our most unviable stores to more cost-effective and strategic locations as part of the ongoing strategy to cut costs, settle debts and optimise cashflow,” Andrew Dixon, Uchumi’s chief operating officer, said in a statement Friday.

Uchumi has over the past two years shut down several non-performing branches across the country as increased competition from old and new rivals upended its earnings.

Uchumi last month closed its Jipange (Ruaraka) and Capital Centre branches, outlets which at some point were key contributors to its bottom-line but degenerated into shells as customers decamped to the competition.

Other branches the chain has closed over the past two years include those located in Nairobi’s Taj Mall, Syokimau, Maua, Embu, Eldoret, Nakuru and Kisii among others.

Mr Dixon in January hinted at the imminent closure of the Sarit Centre branch, saying the retailer was negotiating with the landlord to extend their expired lease even as he admitted that hopes remained dim.

“Uchumi was our first tenant when we opened the Sarit Centre and we have had a long and good relationship,” Nitin Shah, the shopping complex’s COO, said in a statement.

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