Cover Story
was recruited in 2015 as the first non-family member to
head the multi-billion-shilling business. He was later
returned to his position.
In March 2016, Mr. David Kimani son to Naivas
supermarkets founder Peter Kago claimed his eldest
brother Newton Kagira presented a forged will. Kimani
said Mr. Kagira, who initially claimed a 20 per cent
stake in the retail chain, lost an opportunity to own
shares in the business when he “squandered multiple
opportunities” by mismanaging Rongai Self-Service
Store.
The Asian connections
Asians form one of the minority groups in Kenya.
Their forefathers were instrumental in laying the
foundation of modern Kenya. They passed the torch to
their sons and daughters whose work has impacted the
lives of millions of citizens nationwide. Asians have been
known to work as family units involving family members
in the everyday running of their businesses. According
to Forbes, East Asian economies find it risky to form new
businesses with outsiders beyond the family circle.
According to Alykhan Satchu, one of the reasons
behind the success of Asian businesses is their ability
to leverage family human capital effectively. “I also
think Asian businesses have a ‘live meager, dream big’
philosophy as Kenyan industrialist Manu Chandaria once
put it,” says Satchu.
Chandrana FoodPlus Supermarkets Ltd, Khetias,
Gilani’s, Ukwala (now Choppies) are large retailers
performing relatively well run by their respective
families, having originally established as small shops in
the neighbourhoods.
Chandarana recently rebranded from Chandarana
supermarkets to Chandarana Food plus changing its
strategy from purely prepackaged goods that have a long
shelf life to include perishable products that are as well
sold online.
Khetias Supermarkets operates in the Western and
North Rift regions of the country, the company has plans
to expand their services nationally and even have outlets
in the newborn republic of Southern Sudan.
Gilani’s Supermarket Ltd is a leading wholesale and
retail Supermarket in Nakuru offering a wide range of
Consumer goods.
Anchor tenant woes
Nearly all mall structures in the country and globally
prefer having anchor tenants who going by their name are
the foundation for the mall. These tenants are chosen on
the basis of their potential to draw a large number to the
malls.
“Everything about a mall is built around who the
anchor tenant is. The anchor tenant is the key deciding
factor on who your target market is, what will be the
tenant mix and how the design of the mall will be done,”
says IMG Chief Executive Officer Peter Gacheru, in
reference to the the soon to be opened Waterfront mall in
Karen.
Despite the increase of retail space in the country
interested and aspiring tenants who would have wished
to set up their stores are constantly shunned away by
the monthly rent expenses they have to raise. Many
anchor tenants have to deal with constant pressure to
keep up with up and coming malls coupled with having to
constantly change marketing and customer experience so
as to retain and upgrade their image.
Experts say that getting an anchor tenant is one
of the first things a developer does before deciding
whether or not to make an investment. They say when
the anchor tenant coughs, the rest of the tenants catch a
cold. According to Standard Digital ‘How turmoil in retail
sector is hurting shopping mall owners’
Non performing anchor tenant, Nakumatt Holdings
Limited that occupied Thika Road Mall and Next Gen
left tenants and developers in panic forcing them to
re-strategize.
Arabian retailer Souk Bazaar opened its doors on 21st
October as the new anchor tenant for the Nextgen mall
targeting shoppers in the South B and C areas.
Carrefour whose local franchise is held by Dubai-
based conglomerate Majid Al Futtaim is set to take up
several spaces left by Nakumatt this November.
Deacons PLC’s CEO Muchiri Wahome blames non
performance of major supermarket anchor tenants for
reducing traffic into the malls. With 98 per cent of the
company stores operating in malls such as Mr Price and
F&F, data shows that this visits have decreased by over 60
percent with customers choosing to visit other facilities.
Worth noting is that even as the anchor tenants go
through turmoil a good number of malls are still afloat
due to the number of food outlets and arcades the malls
have to offer. A good example is Sarit centre where the
parking lot is almost full throughout the day. While this
scenario continues to play out, store and business owners
grapple with the upsurge of online shopping and cheap
imports that have flooded the market reducing value of
authentic products TB
NOVEMBER 2017 • THINK BUSINESS | 31