Tuskys Supermarkets has opened a new store in Uganda, bringing the Kenyan retail chain’s outlet count in the neighbouring country to seven.
The retailer, Kenya’s second largest after Nakumatt, on Friday opened the new store in Nansana town located about 15 kilometres from Kampala, Uganda’s capital city.
Tuskys’ chief executive, Dan Githua, said the new store is about 7,000 square feet, significantly smaller than its Kenyan shops which are between 20,000 and 30,000 square feet.
“We have expanded in Uganda since we believe the country still has significant untapped retail potential,” Mr Githua told the Business Daily in a telephone interview.
“Our stores in Uganda are typically smaller since the Ugandan market is unique to the extent that most of our sales are in the ready foods segment and fast moving consumer goods. A small store with a deli and bakery is adequate.”
Tuskys, which ventured into Uganda in 2009, has 54 stores in Kenya, having recently closed one in Nairobi.
Mr Githua said that the retailer decided not to renew the lease of Express branch on Nairobi’s Sheikh Karume Road since management felt the business had enough presence in the area with “six branches in a 500-metre radius.”
Tuskys’ biggest rival, Nakumatt, has a larger regional presence with nine stores in Uganda, six in Tanzania, three in Rwanda and 46 in Kenya. This totals to 64 outlets across East Africa.
Uchumi Supermarkets, the other Kenyan retailer which had a regional presence, exited the Tanzanian and Ugandan markets in late 2015 after years of making losses.
Tuskys’ expansion comes at a time when most Kenyan retailers are struggling to make a profit despite billions of shillings in sales.
The poor financial performance has partly been linked to heavy debt loads, including sums owed to suppliers and bankers.