Best practices in retail industry will accelerate growth in business

Britania Foods Ltd CEO Mr. Robert Kagundah has said the growth of local retail market and an increasing competition from their international counterparts has created a vibrant market for biscuits, chocolates and snacks.

Kagundah said this has seen retail chains scramble in raking in profits from a new and vibrant consumer base, adding that in Kenya, the rising middle class with a disposable income forms the essence of the new clientele.

The CEO said the new challenges faced by the local retail sector have left a gap that the international brands are keen to fill, noting that according to market experts, the introduction of global brands means a new dawn for the retail sector.

The increased intensity of competition faced by local supermarkets by their global counterparts, will ultimately improve, if not radically transform, the standards of the retail industry in Kenya and the wider East African region, said the CEO

He said this will in turn trigger the entry of additional global chains into the region often by way of mergers or acquisitions of local chains.

In a press statement, the CEO added that the decline of some local retail shops however over the last year has seen the confectionary industry face significant headwinds as the country’s two giant retailers experience operational challenges.

For instance, Nakumatt and Uchumi Supermarkets operated 46 outlets and 18 outlets nationwide respectively, which accounted for close to 50% of the total retail outlets in key accounts in Kenya. With this reach, the two giant retailers controlled about 35% of the confectionary industry,” added Kagundah.

Consequently, the reduced operations of these retail giants characterized by perpetual empty shelves and low shopper traffic, has forced shoppers to move to their competitors in the recent past, which is estimated that a growth of up to 5% in confectionary business volume migrate to Carrefour, Tuskys and Naivas Supermarkets.

An additional perspective is that global leaders like Carrefour bring, is a deep and almost scientific understanding of their target customer and a business model and structure that is built around delivering value to that customer.

He added that the unique thing about Carrefour is that they understand their typical shopper expects value for money and high product quality and choice.

Our local supermarkets need to urgently emulate as many of these best practices including timely payment to suppliers, cost optimization, measured expansion, and the creation of experiential shopper environments, including online shopping capability to meet the changing consumer trends, before they find themselves behind the proverbial eight ball against global players, said Mr.Kagundah.

Source: Kenya News Agency