KENYA – Uchumi Supermarkets will on Sunday close its prime Sarit Centre branch as part of its cost management and turnaround strategy that has seen its store count drop to 16.

The struggling retailer, which has operated the store for over three decades, says it will now look for an alternative space that is “cost-effective” and aligned to “changing trends” in the sector.

The NSE-listed retail chain has over the past months shut non-performing branches across the country as increased competition from old and new rivals as well as a mountain of debt has strained the business.

“Uchumi has been located at the Sarit Centre for over 30 years and was among the first tenants,” Andrew Dixon, Uchumi’s chief operating officer, said in a statement Friday.

“We will be exploring possible relocation at other venues for our most unviable stores to more cost-effective and strategic locations as part of the ongoing strategy to cut costs, settle debts and optimise cash flow.”

Heavy debts and stock-outs have left Uchumi’s Kenyan operations in a precarious state and forced it to exit Tanzania and Uganda where is was consistently posting losses.

Uchumi, a publicly listed company, is relying on a US$34.37 million from yet-to-be-secured equity investor and US$29.46 million from sale of land in Kasarani, to jumpstart the business.

The retailer recently received a US$6.87 million cash injection from the Treasury just before Christmas, which it used to restock its branches in time for the festive season.

Last month, Uchumi also closed its Jipange (Ruaraka) and Capital Centre branches following sustained low footfall at the outlets which were at one-point key to the business’ bottom-line.

Mr Dixon recently hinted on the imminent closure of the Sarit Centre branch, saying they were negotiating with the landlord to extend their expired lease even as he admitted that hopes remained dim.

“Uchumi was our first tenant when we opened the Sarit Centre and we have had a long and good relationship,” Nitin Shah, the shopping complex’s COO, said in a statement.

Sources indicate that French retailer Carrefour is interested in the Sarit space, having approached the landlord, Soma Properties.

Carrefour Kenya’s executive Franck Moreau declined to confirm the talks, but said the retailer is willing to expand whenever an opportunity arises.

Business Daily