Dan Githua should be gloomy on this Tuesday morning, just like the weather outside his Mombasa Road office. But the Tuskys Supermarket CEO is all smiles and bullish, even affording to make his visitors coffee, on a day that the retail chain has been forced to close doors to one of its busiest outlets in the city centre.
The iconic Tuskys Beba Beba branch was located at the intersection of Tom Mboya Street and Kenyatta Avenue in Nairobi, a sprawling section of town that acts as a transit artery into and out of the city for commuters on the north and eastern side of the CBD.
So Tuskys ferociously reaped big from this location, attracting over 5,000 shoppers daily, and keeping refilling its shelves as products flew off. Then, suddenly, it closed its doors on the evening of 1st May, 2017, never to reopen again.
“It is a painful loss,” Dan Githua, the CEO of Tuskys, tells BUSINESS TODAY. “It was forced on us.”
The building on which the outlet was located was initially owned by Bank of Baroda, but was recently sold to private Kenyan investors who decided to change its use and the retailer become the biggest victim. After three months of fruitless negotiations with new owners, the verdict was out: Tuskys Beba Beba had to give way.
“Exiting the premise has been expensive. But we have managed it well,” Githua said in an interview yesterday, 2nd May at his office, where activities went on as if nothing had happened.
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Already, the retail chain is looking at other locations within the CBD to reopen the Beba Beba branch, which had become a trademark. The new landlords appear set to renovate and the building for stalls and more lucrative tenants.
A visit to the areas showed one wing of the building has already been redone and rented out to stall owners. “Stalls fetch more in terms of rent than retail. We understand their shift in strategy,” says Mr Githua.
According to the Tuskys figures, Beba Beba was number five in the city centre in terms of footfall and revenues after Imara, OTC, Magic and Pioneer in that order. It’s contribution to overall business growth has been significant.
Winning back shoppers in style
Mr Githua says Tuskys has put in place a strategy to recapture over 80% of Beba Beba customers in its other branches nearby such as Imara, Pioneer and Kenyatta Avenue.
“We are talking to the 12,000 loyalty cardholders at the Beba Beba branch. We have given them 500 shillings on their cards to redeem at any of our branches in the city centre,” he says.
Mr Githua is emboldened by the success registered recently when Tuskys closed the Express branch on Sheikh Karume Road and managed to grow traffic at the nearby Magic branch by 70%, meaning a majority of the shut branch customers shifted to the nearest Tuskys outlet.
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“We are doing better because now the costs are lower. Business has grown by 70% and rent has reduced. This closure was a strategic decision as the outlets were too close to each other.”
The close of Beba Beba and express will be more than be made up for by an expanded Tuskys Magic, which will be its biggest outlet in the city centre. “We are refining our business and our customers are able to find us in every part of the city,” he says.
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