Supermarket chain Nakumatt is stepping up investment in Nairobiâ€™s Eastlands to grow revenues with plans to open a large outlet by September.
The retailer is scheduled to open shop at a mall located next to Jacaranda Estate, Donholm, as it seeks to grow its presence in the sprawling middle and lower middle-income area.
The new store will be its second in the densely populated Eastlands area and marks a shift in the retailerâ€™s expansion strategy where it has previously targeted high-end shoppers in malls located in estates such as Karen, Kilimani, Westlands and Nyali.
â€œOur entry to the Eastlands suburb of Nairobi is not accidental but it has always been slightly hampered by lack of retail space to lease in suitably designed shopping malls,â€ said Atul Shah, managing director Nakumatt Holdings.
â€œDue to economic growth, our client base is also growing fast and expanding beyond the traditional market segment,â€ said Mr Shah in an interview with Business Daily.
Nakumatt is banking on the 20,000 square feet-branch at Shujaa Mall, located next to Jacaranda Estate to reach more than 50,000 households living in Donholm, Umoja, Komarock and Kayole.
The supermarketâ€™s new line of in-store packaged goods dubbed Nakumatt Blue Label, which is cheaper than branded goods, seeks to curry favour with price-conscious consumers in Eastlands.
The regional retailer says it will open its 39th supermarket at Kasarani, off the Thika Road superhighway this week. It further plans a new branch in the industrial town of Thika by end of March and four more in Uganda.
The Shujaa Mall will be Eastlandsâ€™ largest shopping complex featuring banking halls, ATM lobbies, franchise shops, cinema hall, food courts, hospital, health and entertainment club and a parking basement.
Nakumatt is ranked Kenyaâ€™s biggest retailer in terms of revenue with Sh38 billion in sales recorded last year. Listed supermarket chain Uchumiâ€™s turnover for last year was Sh13.9 billion.
Nairobiâ€™s Eastlands is fast becoming a centre of competition as top-tier supermarkets Nakumatt, Uchumi and Tuskys move to open retail malls to tap into the rising middle class in the area.
Lenders such as Equity, Co-operative, KCB Bank and Consolidated Bank have also pitched tent in the area.
Eastlands, with a population of about 1.2 million is served by three major shopping complexes: EastGate, Greenspan and Taj Mall mostly dominated by Naivas, Uchumi and Tuskys as well as independent retailers such as Tumaini, Jaharis, Selfridges and Rikana supermarkets.
A client briefing by Ark Consultants on the Shujaa Mall project says the residentsâ€™ monthly income is approximately Sh50,000 per household with a disposable income of about Sh10,000 monthly.
â€œThe economic activities in this area generate sufficient income to afford residents to constitute effective demand for goods and services. The number of persons in the wage bracket is estimated at 500,000 people,â€ says the report.
Nakumattâ€™s new store will adds to its Embakasi and Mega outlets which serve the Eastlands residents.-Business Daily