KENYA – South African retailer, Shoprite has announced closure of its Waterfront, Karen outlet, citing the business as no longer viable on the reduced flow of shoppers.
In relation to this, all 104 employees at the branch have been declared redundant, with their contracts of employment terminated with effect from 20th May 2020.
“Endeavour to continue trading at the Waterfront branch is no longer viable,” Shoprite said in a notice to the Kenya Union of Commercial Food and Allied Workers (KUCFW).
“It is envisaged that the extent of the redundancy will impact all employees at the said branch. There are currently 104 persons employed at the branch of which 74 are KUCFW members.”
“It should be noted that the branch will cease trading operations on a sooner date but this will not prejudice you as you will continue to tender your services at same branch until termination date,” the company stated.
In 2019, the retail giant closed the financial year with a KSh79 billion (US$746.8m) debt, including a KSh571 million (US$5.3m) loan from Stanbic Bank meant for expansion in Kenya.
With the closure, Shoprite will only be left with three outlets; Garden City Mall, Westgate Mall, and Mombasa’s City Mall.
The closure of the store will put a dent to Shoprite expansion plans in Kenya as it had targeted to open seven stores, including six in Nairobi.
When setting shop in Kenya, Shoprite said it was taking advantage of the disarray in Kenya’s retail sector that had resulted in the collapse of established supermarkets.
Two of Kenya’s three top retailers were in trouble including Uchumi, which had closed stores and former regional leader Nakumatt — which collapsed, opening the door to chains such as Shoprite and Carrefour.
“Retail in Kenya currently is in total disarray…we could now go in and secure seven premises without paying anything other than agreed rental,” the chain said ahead of Kenya entry.
The closures will hit Karen’s Waterfront Mall where Shoprite was an anchor client identified to pull shoppers to the shopping complex.
“The management of The Waterfront Karen mall is in receipt of a vacate notice by one of our anchor supermarkets, Shoprite Kenya,” said Waterfront Mall — which is owned by the billionaire Muguku family.
“We would like to assure our customers that their shopping requirements will continue to be met through our other grocers, Game supermarket.”
Shoprite, which is 17-percent owned by retail tycoon Christo Wiese, has grown from eight supermarkets in 1979 to a no-frills mass-market grocer with operations in 15 African countries including two stores in Uganda.