Uchumi upbeat as it plans 13 more branches

 Uchumi Supermarket chain is optimistic about growth prospects in 2015 and expects customer spending to go up. It will accelerate its growth strategy both locally and the region, and expects to increase its branches from the current 37 to 50 branches, spread out across East Africa.

Its management says the decline in the cost of living expected with the reduction in the price of fuel and electricity is likely to increase consumer spending. “We should see a growth in the size of the shopping basket as households get more disposable income with the ease in the cost of living,” said Mr Jonathan Ciano, chief executive Uchumi Supermarkets.

He was speaking today when Uchumi unveiled the winner of a brand new Nissan Almera. The car, valued at Sh2 million, was the grand prize for a Christmas Holidays shopping promotion dubbed Toboa Maisha na Uchumi. Hundreds of Uchumi’s shoppers won over Ksh8 million worth of prizes that included shopping vouchers, school fees, electronic goods and cash prizes.

“This is one way of thanking our customers who have really supported us through the years,” said Mr Ciano. The retail chain late last year raised Ksh896 million through a rights issue. The money will be used to finance the chain’s growth throughout East Africa. The rights issue had been oversubscribed by 84%, attracting Ksh1.64 billion, which Dr Ciano noted was an indication of investor confidence in the oldest retail chain in the country.

The new shares started trading on the Nairobi Securities Exchange on January 8. Dr Ciano said the funds will enable the company to grow its branch network in Kenya, Tanzania, Uganda and Rwanda and also refurbish existing outlets. He added that the money will also help Uchumi have more working capital for its operations.

“By December, we expect to have 50 branches from the current 37. Most of these are in highly lucrative areas,” he said. Over the last financial year, the chain opened eight new branches bringing its total branch network to 37 spread out in Kenya (27), Tanzania (four) and Uganda (six). There are plans to open three new branches in Rwanda in the course of this year.

“We expect to continue with the growth of the business as the new outlets mature,” Mr Ciano said. “We have adopted cautious strategic growth approach in the Eastern African region, an initiative that will be fully supported by the proceeds of the rights Issue and the positive effect of cross listing in the EAC countries. Uchumi shares are now trading in Kenya, Rwanda, Uganda and Tanzania, making us a truly Eastern African company.”