The Nation (Nairobi)

30 May 2007

Kenya: Nakumatt Turnover Grows By 150 Pc

Nairobi — Supermarket chain Nakumatt Holdings posted over Sh20 billion ($300 million) in trading turnover in 2006, up from Sh8 million in 2005, rising by 150 per cent.

The increase appears to vindicate figures contained in the 2007 Economic Survey released by the Government on Monday.

"We managed to post a more than Sh20 billion trading turnover last year attesting to the economic survey's accuracy," Nakumatt operations director Thiagarajan Ramamurthy said yesterday.

According to the Economic Survey, consumer spending grew by 14.6 per cent while wholesale, retail trade and repairs by 10.9 per cent in 2006 compared to 2005.

The survey showed that consumer spending stood at Sh1.2 trillion in 2006 up from Sh1 trillion in 2005, representing a 14.6 per cent growth.

Consumers spent Sh575 billion on food and beverages and Sh37 billion on clothing and footwear at a time when supermarket purchases account for slightly over half of all household shopping. Wholesale, retail trade and repairs grew by 10.9 per cent in 2006 up from 5.5 per cent in 2005.

The growth is understandable given the level of activity that characterised the sector during the year involving virtually all the players. For instance, Uchumi Supermarkets, which collapsed on 1 June, 2006 only to be successfully reopened under a Government-led recovery strategy a month later, and Tusker Mattresses - which has since then changed its name to Tusky.

There are also other smaller supermarkets including estate-based ones were all active either through intense marketing campaigns or ambitious expansion programmes on the part of Tusky.

Mr Ramamurthy predicted further growth in the wholesale and retail sector this year. As to Nakumatt which recently received an ISO 9001:2000 quality certification, Mr Ramamurthy said, "Buoyed by such turnover growth, we are heavily investing in an ambitious stores expansion project to enable us meet consumer needs and have recently opened our 18th branch."

Economy

The Nakumatt boss explained that the sector will continue to spur positive economic growth largely due to growing consumer spend on food and related retail commodities.

"In developing countries such as Kenya, the retail sector has a high economic development impact, as it acts as a bridge for disposable income spread," Mr Ramamurthy explained.

"Increased vibrancy and competition in the sector is key to economic growth as it will automatically lead to lower commodity prices effectively boosting living standards."

Noting that all the necessary fundamentals for growth are ripe, the operations director, however, warned that increased investments in the sector will have to be encouraged to sustain its growth momentum.

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