KENYA – Naivas, the largest supermarket chain in Kenya, has reported 19.6% profit dip in 2024 despite an increase in sales.
After tax, Naivas’ profits decreased to KSh1.9bn ($150m) from KSh2.3bn ($180m), a drop of 19.6% while Sales increased to KSh 91.9bn ($710m) up 3.6% from KSh 88.9bn ($690m).
Mauritian conglomerate IBL Group, the biggest shareholder in the supermarket chain, attributes the drop to structural reorganisation, the costs associated with the opening of new stores, and increased competition from Carrefour and Quickmart.
“Naivas has shown strong growth, despite facing challenges such as the depreciation of the Kenyan shilling, some political unrest and a very competitive retail landscape,” added IBL Group CEO Arnaud Lagesse in the annual report for 2024.
Naivas, the market-leading grocery retailer in Kenya, has expanded in 2024 to 107 stores and over 12,000 employees. In the latest financial report, the chain’s expenses increased by 4.2% to KSh90.2bn ($700m).
The retailer has been aggressive in its retail network over the years, taking up prime spaces, especially near populous estates.
Naivas Supermarket has also become the latest retail to adopt to a new trend where changing consumer lifestyles are pushing the leading supermarket chains to embrace 24-hour operations.
This trend, sparked by increased urbanisation, hectic schedules, and a surge in demand for convenience, is taking off in Nairobi and other major cities.
Naivas has responded by opening of a second store in the Kilimani area of Nairobi at Wood Avenue that has taken its local tally to a total of 107 stores countrywide.
Naivas Chief of Strategy Andreas Von Paleske cited customer demand and the desire to provide flexible shopping options as key motivators for the transition.
The emergence of the gig economy has substantially contributed to this operational shift with the increased night-time activity observed by ride-hailing services such as Uber and Bolt indicating a broader transformation in urban mobility patterns and lifestyle preferences.
“We acknowledge the requests of our customers, and that’s why we saw the need to bring another store to address the ever-growing population of Kilimani. It is a growing area, and the demand is what made us come here again.” Naivas Operations manager Cyrus Mathenge stated.
Quickmart, the second largest supermarket chain in the country, has also extended hours at its busiest branches, particularly in high-density residential neighborhoods, aiming to capture late-night shoppers and shift workers.
Sign up HERE to receive our email newsletters with the latest news and insights from Africa and around the world, and follow us on our WhatsApp channel for updates.
