After a difficult three years Uchumi has set out a new strategy to turn around the company’s fortunes. This centres on improving its funding, through a government bailout and investment from a new partner, and expanding through a low cost, franchise model. Slow performance
Uchumi has experienced slow performance over the last few years and due to cash flow difficulties has not always been able to pay suppliers. This has led to challenges with suppliers, which have ultimately led to out of stocks. The issue of out of stocks has led to reduced footfall and slower sales growth.
These difficulties have resulted in the government offering a capital injection of KES500m (US$4.8m) in January. Meanwhile, Uchumi also launched a two-and-a-half-year turnaround plan to improve the business.
The measures that were put in place have so far successfully reduced company losses by nearly half in the last six months. New strategy aimed at stabilising performance
Uchumi’s strategy can be broken down into four key areas; 1. Selling assets
Through detailed fiscal management Uchumi closed loss making stores in Uganda, Tanzania and Kenya. Going forwards it will be focusing upon more strategic expansion in better locations. 2. Finding an investor Uchumi is looking […]