Connect with us

Business News

Retail best practices hold key to growth of confectionery business

Britania Foods CEO Robert Kagundah says increased intensity of competition faced by local supermarkets by their global counterparts, will ultimately improve, if not radically transform, standards of the retail industry



The growth of local retail market and an increasing competition from their international counterparts has created a vibrant market for biscuits, chocolates and snacks as retail chains scramble to make the most from a new and vibrant consumer base.

In Kenya, the rising middle class with a disposable income forms the gist of this new clientele. However in light of the new challenges faced by the local retail sector has left a gap that the international brands are keen to fill.

This, however, according to market experts is a good thing as the introduction of these global brands means a new dawn for the retail sector as they bring out the competiveness in the sector, but they still remain optimist that the turbulence can be weathered.

“The increased intensity of competition faced by local supermarkets by their global counterparts, will ultimately improve, if not radically transform, the standards of the retail industry in Kenya and the wider East African region. This will in turn trigger the entry of additional global chains into the region often by way of mergers or acquisitions of local chains,” said Britania Foods Ltd CEO Mr Robert Kagundah.

The decline of some local retail shops however over the last year has seen the confectionary industry face significant headwinds as the country’s two giant retailers experience operational challenges.

‘’For instance, Nakumatt and Uchumi Supermarkets operated 46 outlets and 18 outlets nationwide respectively, which accounted for close to 50% of the total retail outlets in key accounts in Kenya. With this reach, the two giant retailers controlled about 35% of the confectionary industry,’’ added Kagundah.

Consequently, the reduced operations of these retail giants characterised by perpetual empty shelves and low shopper traffic, has forced shoppers to move to their competitors in the recent past which is estimated that a growth of up to  5% in confectionary business volume migrate to Carrefour, Tuskys and Naivas Supermarkets.

READ: Treasury says KQ rescue move an informed choice

An additional perspective that global leaders such as Carrefour bring, is a deep and almost scientific understanding of their target customer and a business model and structure that is built around delivering value to that customer.

What is unique about Carrefour, for example, is that they understand their typical shopper has relatively more disposable income, is very discerning, but expects value for money and high product quality and choice. Our local supermarkets need to urgently emulate as many of these best practices including: timely payment to suppliers, cost optimization, measured expansion, and the creation of experiential shopper environments including online shopping capability to meet the changing consumer trends, before they find themselves behind the proverbial eight ball against global players,” said Mr Kagundah.

Mr Kagundah, however, advices that to maximise sales and ensure repeat visits, local supermarkets should go to great lengths to create an ecosystem where customer experience and expectations are routinely exceeded and suppliers are paid on time within agreed terms.

Business Today is the leading independent online business website in Kenya. Started in 2012 by a veteran business journalist, it has a huge following both in Kenya and abroad. It covers various business and related issues. Email editor at: [email protected]

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

News Updates

NEWS1 hour ago

Police say conman has ‘special ties’ with Sabina Chege

Director of Criminal Investigations George Kinoti was, however, uncomfortable divulging further details regarding their probe in the presence of journalists,...

Health2 hours ago

41% of Kenyans depend on raw water sources

Shortage means that a large population of women and children in the rural areas spend up to one-third of their...

NEWS22 hours ago

Another handshake: Raila, US envoy mend fences

Ambassador Robert Godec pledges support for efforts to reconcile the nation and deliver justice at a meeting with the NASA...

NEWS23 hours ago

Matiang’i backs Waititu, orders all bars closed

Interior Cabinet Secretary said the crackdown will be immediately rolled out in other counties urging other governors to follow in...

NEWS1 day ago

Heart-rending photo of ailing Njambi Koikai moves Kenyans

Former QFM host says she has been in hospital in the US for two weeks now and had four chest...

Politics2 days ago

UK seeks to seize Cambridge Analytica servers

Facebook also says it has hired its own digital forensic team to conduct an audit to find out whether the...

Entertainment2 days ago

Popular musician perishes in road accident

The musician, popularly known as Shavey de King, died on the spot at around 10.30 pm after being crushed by...

NEWS2 days ago

Bamburi partners with KeNHA to repair Stoney Athi bridge

The company has provided concrete solutions and technical expertise for the repair works on the bridge which was last week...

Politics2 days ago

NASA senators vote to kick out Wetang’ula

At least 19 senators, who attended Nasa's Parliamentary Group meeting at Parliament Buildings in Nairobi, unanimously voted to replace Mr...

Politics2 days ago

Cambridge Analytica confirms role in Kenya elections

In a undercover film broadcast on Channel 4 News in the UK on Monday night, Cambridge Analytica Managing Director Mark...