NAIROBI (Xinhua) --
The retail sector in Kenya would remain bullish
in 2018 even as some local retailers face challenges that have
led to closure of several outlets, according to analysis.
The industry would continue to register expansion of stores and
entrance of foreign outlets, Cytonn, a Nairobi-based investment
firm, said Monday.
"The retail sector is expected to record increased activity
in 2018 as seen through retail chains unveiling expansion
plans," said Cytonn in an analysis of the sector.
Among the retail outlets set to expand in 2018 is Tuskys, one
of Kenya’s largest supermarkets.
Last week, the retail chain announced a three-year plan to
increase its foothold by 56.3 percent to 100 new stores in Kenya
and Uganda by 2020, from 64 stores presently.
The expansion plan, which will cost the retailer 29 million
U.S. dollars, will anchor on technology, innovation and
Other retailers planning to expand include Naivas and
international retailers such as Manix Clothes Stores, French
retailer Carrefour, Botswana’s Choppies and South Africa’s Game,
all operating in Kenya.
Naivas Supermarket, the second leading retailer in Kenya, is
expected to open a new 24 house retail store in Naivasha, the
west of Nairobi, with the move following the opening of another
shop in the capital Nairobi late 2017.
On the other hand, Rams Supermarket, a new entrant opened an
outlet on the east of Nairobi in December 2017 as an anchor
tenant at a mall.
The retail store that originates from Commonwealth’s, St.
Kitts and Nevis, fills the gap left by struggling retail chain
Similarly, Choppies plans to acquire the retail space once
occupied by troubled Nakumatt after it was evicted at Nanyuki
"The above is a clear indication of a bullish view on the
sector as both local and international retailers continue to
compete to gain traction in the Kenyan market," said Cytonn.
The indication of a positive outlook in Kenya’s retail
outlook is supported by three things.
First is an expanding middle class that has a high purchasing
power, second is a conducive macro-economic environment in Kenya
with gross domestic product growth of 5 percent in 2017 and
third a low retail penetration rate of 35 percent.
However, Cytonn noted that supermarkets in the East African
nation need to address issues on corporate governance and
ambitious expansion projections to avoid challenges faced by the
struggling retailers, Nakumatt and Uchumi.