Kenyan retailer, Nakumatt, is making a concerted effort to secure its dominance by expanding into other countries in East Africa and innovating its current retail offering. Karen Kühlcke spoke to Sailesh Savani, a director at Nakumatt, about the supermarket group’s progress in the region. 

The directors of Nakumatt have been quoted as saying that by 2010, Nakumatt plans to operate 40 outlets in the region: 30 in Kenya, four in Tanzania, three in Uganda and three in Rwanda. Has the global financial crisis affected these plans and if so what are your revised projections?

Yes, there is a change in our plans in terms of the timing and the expansion number has been pushed forward by 2 years. We therefore plan to have 40 outlets by 2012.

Are you pleased with the results of the first months of trading in Kigali, Rwanda?

It’s close to one year since we opened our store in Kigali and it has been quite encouraging. The customers of Kigali have embraced our new store, our variety and our concept.

What are the early indications from your new supermarket in Kampala?

Kampala is quite overwhelming considering the fact that we only have 70% of the products that we plan to have. The product range will be enhanced in the coming months.

Apparently Ugandans are loyal to the small roadside shops. How do you plan to entice them to the shopping mall or are you aiming at a different segment of the market?

Nakumatt is a known name in the region. We had several people repeatedly asking, “When are you opening in Kampala” before we opened. One of Nakumatt’s core values is to enhance lifestyles. It’s our core values, our concept and the entire experience that we create, which is going to attract customers to our store in Kampala. We are creating awareness of our presence through various media and we are already seeing increased foot-fall.

Is the product mix in these stores different from your supermarkets in Kenya?

The product mix remains fairly similar, although one of our strategies is to work with local manufacturers and sell whatever meets our minimum standards. This will be our contribution to the economies of the countries that we operate in - helping local producers reach a larger customer base through our stores.

Do you think competition from stores like Shoprite and Game will significantly affect the performance of your supermarkets in Uganda and Tanzania (when you open there)?

We believe we have our own story to tell. Our unique concept and the overall experience that we deliver helps us stand out of the crowd.

When a “foreign-owned” supermarket opens up in an emerging market the issue of locally-manufactured/supplied goods is always raised. Given the dominance of Kenyan companies in the region, people likely to be watching Nakumatt shelves very closely in this regard. What is currently the percentage of locally supplied/manufactured goods on the shelves in the various regions where you operate?

In Kenya, our product mix is 45% imported and 55% local. This is of course not the same in the other countries, but this will change in time as local manufacturers in the other countries 'come up to speed' in terms of the quality of their products, the packaging, costs and creating consumer awareness of their own products.

Please tell us more about the rollout of the Nakumatt convenience/express stores. Do you currently have, or do you plan to open, express stores at fuel station forecourts?

Our express format is much larger than the fuel station C-Stores both in terms of space and product mix. We are studying the express format very carefully before we take the next plunge, while we are continuously on the lookout for new locations for this format.

How readily are east African shoppers adopting innovations like online shopping, loyalty clubs, the Nakumatt group on Twitter, etc? 

The east African customer, we believe, is as aware as any global customer in terms of current trends. They are also quite techno-savvy and open to new ideas and innovations. That is what has kept Nakumatt going in bringing innovations to the customer.

It appears that the operation of 24-hour supermarkets is becoming one of your key distinguishing factors. How many cities/sites can support 24-hour shopping?

Today’s customer is time poor, be it in whichever city. That fact in itself is a driving force for our 24-hour concept. Every city in east Africa can absorb at least one 24-hour store if not more.

In your view what are the main factors likely to affect the development of the retail sector in east Africa over the next five years?

The main factor affecting the retail sector and also a key barometer for the sector is the GDP. The higher the GDP, the greater the growth of the retail sector will be. A growing middle class is another indicator of happy times for the retail sector.

Improved infrastructure will definitely help in developing the retail sector as it relies heavily on an efficient supply chain. Developing local produce of higher standard, with the local standards authorities co-operating with the manufacturers and guiding them in the quality processes will also have a marked effect.