Kenya’s largest supermarket Nakumatt has bought out a local supermarket operating in western Kenya. The buyout of Yako Supermarket’s three outlets in Bungoma, Kakamega and Busia follows the approval of the deal on October 9, 2015 from the Competition Authority.
Nakumatt, which already has a branch in Kakamega acquired a loan from three commercial banks – Standard Chartered, Kenya Commercial Bank, Bank of Africa and Diamond Trust Bank – to fund the acquisition. “We think the acquisition is a positive move given that Yako Supermarket already has an established clientele which will give Nakumatt advantage over its competitors,” analysts at Standard Investment Bank said on Wednesday October 21, 2015.
Neither the value of the acquisition nor the loan amount has been revealed yet. Nakumatt has now begun refurbishing the three stores to bring it up to its standards, which is primarily high end.
Nakumatt is to retain all the 283 employees of Yako Supermarket following the acquisition according to the Competition Authority.
Analysts further say that large retailer face stiff competition from locally established retail stores such as Yako in their pursuit to expand outside Nairobi and its environs. This is due in part to the smaller market sizes and limited available retail space in the counties.
The announcement by Nakumatt comes after the one made by Naivas, the third largest retail chain in Kenya, that it would open branches in Kisumu and Ukunda in Kwale county to tap into the growing economic opportunities in those regions.
This follows a trend by major supermarkets such as Tuskys, Naivas, Uchumi as well as Nakumatt, which are now targeting the emerging growth opportunities in counties as brought about by devolution. (TUKO.co.ke)
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