Naivas supermarkets add alcohol to shelves giving it a competitive edge

Bottles on a shelf, lightened up. spirituous beverages at a bar.

KENYA – Kenyan retail chain Naivas supermarkets has diversified to selling alcohol to grow its revenue, breaking a decades-old business practice that gave its rivals a competitive advantage.

The family-run retailer began opening alcohol kiosks within its newly-opened food market stores with the launch of new outlets that offered shoppers a wide variety of products, including fresh produce.

This leaves Tuskys as the only top retailer in the country that does not deal in alcohol, in a market that has seen new entrants such as France’s Carrefour and South Africa’s Shoprite sell beer, whisky and wines.

“The decision to set up an alcoholic beverages shop in our outlets was driven by customer demand,” said Willy Kimani, the Naivas chief commercial officer.

“The typical customer wants to meet all their basket requirements in a single location and in order to facilitate customers so that they do not feel they have to move elsewhere for these purchases. We took the decision to set up and run the shops ourselves,” he added.

Mr Kimani further added that the company research tracked different product categories and alcoholic beverages were confirmed to be among the necessary ones.

According to Business daily, alcohol sales in supermarkets and corner shops have increased more than five-fold in the wake of the coronavirus that led the government to order closure of bars to curb the spread of the infectious disease in Kenya.

The coronavirus pandemic has meant that Kenyans have been forced to stay indoors to try to contain its spread and thus many people are buying more alcohol to drink at home as a result.

The narrative is same in other countries across the globe with the likes of The Association for Alcohol Responsibility and Education in South Africa launching a national awareness campaign urging consumers to ‘Choose Responsibly’ during the lockdown period.

The organisation’s aim is to reduce alcohol related harm by creating awareness and performing on-going research, providing effective collaboration with its partners, and implementing strong stakeholder management.

In other recent updates on Naivas, the retailer is set to bag US$15 million for the sale of its minority stake to IFC, a member of the World Bank Group alongside French private equity fund Amethis Finance, DEG and MCB Equity Fund.

The new capital injection is earmarked for expansion in the highly competitive local supermarket business that has attracted major players across the globe.

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