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an incentive for foreign retailers, according to Oxford Business Group.
The increased mall space in the country has significantly grown. Nairobi’ s mall space supply has a market shares of 59.4 per cent. The supply is expected to grow over the next 3 years at a compounded annual growth rate( CAGR) of 7.3 % to 6.90Mn square feet in 2020 from 5.6Mn square feet in 2017, according to Kenya’ s Retail Sector report by Cytonn Investments.
Destination malls are the best performing with an average rental yield of 10.3per cent, compared to a market average rental yield for the retail sector of 8.3 percen, t hence the reason for global retailers taking interest in the market.
Kenya’ s high population growth of 2.6 % per annum against world’ s 1.2 % has created demand for retail goods and services. The rising middle-class purchasing power has increased, accompanied with changing lifestyles. Their appetite for convenient shopping has the middle class consumer interested in the global entrants with well stocked shelves and variety of goods and services to match this need.
Kenya’ s urbanization rate at 4.4 %, which is relatively high compared to the world’ s 2.1 %, has resulted in a need for retail stores and entertainment spots for the youths’ varying tastes and preferences for different goods and services. African millennials are changing their consumer spending patterns, from markets to malls, where they can eat, drink and socialize as well as shop,” says Forbes.
The Family Debacles at Tuskys and Naivas
Tuskys and Naivas are family owned retail giants and with family members at the top of the chain, comes with it a fair share of disagreements and drama. The Knight and Frank Global Wealth Report confirmed the biggest worry for billionaires is how to transfer their wealth to the next generation. Most of them expressed their fear that their children are not ready to take up the mantle of running the family business. Failure to draw and have proper succession plans has seen a number of relatives turn on each other for their‘ piece of cake’.
Tuskys has been on the radar quite a lot when it comes to family disagreements. Two brothers and co-owners of Tuskys Supermarkets Stephen Mukuha and George Gachwe were last year charged with theft of KSh 1.64Bn from the retail chain between 2002 and 2012
In May 2016, Tuskys Chief Executive Daniel Githua was humiliated in a forced eviction by the grandchildren of Joram Kamau founder of Tuskys Supermarkets. Githua
30 | THINK BUSINESS • NOVEMBER 2017