Tanzania: Rise, Exits of Supermarket in Tanzania – Implications to Farmers, Agro-Processors

Tanzania: Rise, Exits of Supermarket in Tanzania - Implications to Farmers, Agro-Processors

The supermarket upsurge has yet to be firm in Tanzania as it has in other countries in the region and perhaps compared to other parts of the world.

Within east Africa after years of attempting to have their brands or enters partnerships, supermarket chains in my assessment have only succeeded to take over a big sales portion of food retail space in Kenya and, to a lesser extent, some of its neighbouring Uganda.

They have made some gains in Rwanda and are not quite sure what is like in Burundi but, their share of the overall food market and buying food from these stores remains small or from an investors point of view, the business isn’t cost effective.

The news that well-known South African store, known as Game, is lined up to close its doors in Tanzania, not only shocked my expectation but reminded me of Shoprite from south Africa; Uchumi and Nakumatt from Kenya, who at different times decided to close their doors in the Tanzanian market.

Much as many shoppers might view this exit as a normal exit, as the government, known to be putting in place setting aimed at attracting investment one need to go further and think not only critically but strategically about what this will exit mean to emerge homegrown entrepreneurs who might want to invest in such sector.

While joining those shocked with Game exit news, was triggered to think beyond a common man’s sight as to what is likely to be implications of such for horticultural farmers and companies that have borrowed from financial institutions earmarked the Game as their off taker?

Likewise, reflection went further to try to think is Game exit instigated by the high cost of operation.

The unpredictability of supplies from local suppliers both farmers and those adding value or caused by logistic issues or the fact that the culture of most Tanzanians isn’t there yet at buying their groceries and other home appliances from supermarkets and malls? Or is increased the small efficient retailer’s also known as mini-supermarket or the so called "magengeni" meaning food and vegetable vendors found across upcoming urban areas share squeezing out of larger supermarkets?

All these thoughts were reverberating in my thinking cognisant of the fact that there has certainly been a rapid growth in the role of supermarkets in almost all parts of the world although measuring the exact market shares for a place like Tanzania is complicated by […]

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