17 October 2017

Tanzania: Nakumatt Store Shut Over Rent, Empty Shelves

Photo: The Citizen
The management of Mlimani City closed Nakumatt's shop after failing to comply with contractual requirements, including paying rent.

Dar es Salaam — The management of Mlimani City closed Nakumatt's shop on yesterday after failing to comply with contractual requirements, including paying rent.

Nakumatt has not paid rent to Mlimani Holding Ltd, the owner of Mlimani City Mall, for three months, according to Mlimani City General Manager Pastory Mrosso.

"In three months, Nakumatt should have paid Sh300 million, but it has not yet done so," Mr Mrosso told The Citizen by telephone yesterday.

Mr Mrosso noted that, the Kenyan retail chain had also been operating below standard with almost empty shelves even as it enjoyed privileges of being an anchor tenant in Dar es Salaam's most popular mall.

"As anchor tenant, Nakumatt enjoys some privileges, including lower rent because such occupants are expected to attract visitors and benefit other business operators within the mall. However, they are operating below average... their shelves are almost empty and at the same time, they are not paying rent," stressed Mr Mrosso.

This comes almost one month since senior government officials from Tanzania and Kenya agreed to work together to address Nakumatt challenges.

The meeting, which was held in Dar es Salaam early last month, was co-chaired by the Permanent Secretary in the Ministry of Industry, Trade and Investment, Prof Adolf Mkenda, and the Principal Secretary in Kenya's Department of Trade, Ministry of Industry, Trade and Cooperatives, Dr Chris Kiptoo.

During the meeting, Dr Kiptoo is on record as having assured his Tanzanian counterpart that Kenya would do everything to ensure Nakumatt and Uchumi Supermarkets flourished.

He said the Kenyan government had asked the two companies to provide it with a detailed analysis of the debts by October so that it (the government) could be able to see how to help.

Figures, produced by Prof Mkenda showed the retail chain had not paid Sh1.6 billion to its suppliers for a couple of months.

According to Mr Mrosso, the decision to close the retail chain's outlet was not surprising.

"Our decision is not surprising because we earlier met Nakumatt together with Prof Mkenda, the supermarket promised to sort out its problems with suppliers, including Mlimani City. However, nothing has happened so far. Even when we served Nakumatt with a 10-day notice, they didn't show up," he said, noting, however, that the ultimate goal was that they should be able to sit down and discuss a way forward.

Apart from Mlimani City, Nakumatt's other outlets are still running dry and suppliers claim they have not been paid for services offered for almost one year now.

Before the closure yesterday, the Mlimani City outlet had virtually no products to the extent that in places, where one would expect to see cooking equipment, detergents, toi·let·ries and body oils, among others, there were only biscuits. Similarly, while normally one would find a section of the shelves containing packets of biscuits, they have now been spread in one row in a majority of the shelves replacing other products.

Most of the shelves were empty except for those furnished with clothes, television sets, novels and home equipment, among others.

Speaking to The Citizen yesterday, Mr Joseph Mlay, who chaired a taskforce for suppliers of goods to Uchumi Supermarket (another Kenya-based retail chain that closed shop in Tanzania and Uganda in 2015), said the Nakumatt situation was worrying.

"I have just been informed about the closure and I am on my way to Prof Mkenda's office so as to know a way forward. What is happening is contrary to what we had agreed upon last month," he said.

He said it was disheartening to note that losses were for the very same people.

"Those of us, who were supplying to Uchumi are the very same people that Nakumatt might also go with our money... .this are discouraging," he said.

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