KENYA – Regional alcohol manufacturer, East African Breweries Limited, recently reported a 15% growth in revenue in its full year results with the Kenyan market contributing 66% of the total sales.
Sales in the East African leading economy rose by 11 percent, particularly in spirits which was 24% for mainstream category and 24% for total spirits.
The growth was registered despite the COVID-19 related restrictions on alcohol sales which have led to bars and clubs being momentarily closed, on and off ban of sale of alcohol in restaurants and eateries, with the establishments operating under reduced hours up-to-date.
To this end, the alcohol maker just like other players in the market, shifted focus from on-trade channels to growing its off-trade contribution as consumers also found alternative routes to quench their thirst.
This rejig of market routes has led to the exponential growth of liquor stores in the country specially in the capital, Nairobi.
According to reports by business daily, the number of wines and spirits shops licensed in Nairobi in 2020 has increased 274% compared to previous years.
This was revealed by Nairobi County liquor board CEO Hesbon Agwena, highlighting that a total of 1,648 liquor stores were registered in Nairobi alone in 2020, compared with 440 in 2019 and 430 in 2018.
The trend has been heightened by emergence of new norms such as open grounds filling with cars as ‘park and chill’ becoming the in thing.
Shifting gears, the retail sector performance in Nairobi in the first half of 2021 recorded a slight improvement of 0.1 per cent rental yield to 7.6 per cent from 7.5 per cent in the financial year 2020 due to increased market activities.
According to the latest Nairobi Metropolitan Area (NMA) Retail Sector H1’2021 Markets Review, the average occupancies and asking rents also recorded improvement in performance by 0.7 percentage points and 0.3 percentage points from 75.2 per cent and Sh168.6 per SQFT in financial year 2020 to 75.7 per cent and Sh169.1 per SQFT in first half of 2021.
The general improvement in the performance of the sector was due to among others, aggressive expansion of local and international retailers such as Naivas and Carrefour.
The retailers took up space previously occupied by troubled retailers such as Tuskys and Nakumatt with the retailers opening more than 13 stores in 2021 in different locations across the country.
Also driving the performance, the report by Cytonn real estate developer says was improved infrastructure which is opening up areas for investment opportunities and boosting property prices.
Positive demographics also played a part with urbanisation and population growth rates at 4 per cent per annum and 2.3 per cent per annum respectively, compared to the global average of 1.9 per cent per annum and 1.1 per cent per annum, respectively according to World Bank.
Another factor that led to increased market activities in the retail front, according to the report, was the gradual reopening of the economy.
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