Shoprite has gone back on its plan to open seven stores in Kenya due to high cost of renting space. The South African retail chain says its plan to expand in the country has been hampered by competition, particularly from Paris-based Carrefour.
“Due to the aggressive expansion of Carrefour there are no cheap sites left behind with the demise of Nakumatt and Uchumi,” according to Gerhard Fritz, Shoprite’s head of operations outside SA in an emailed response to questions from Bloomberg. “We have declined some sites as we feel rentals are too high. Landlords are having a field day playing each off against each other.”
Even so, Shoprite is scheduled to open three more stores in Kenya next year, he said. For Carrefour’s part, the retailer has trebled its number of outlets in the country to six in the past year and has two more opening in coming weeks. Nakumatt, which applied to the high court to be placed under administration in October 2017, had 62 branches across the East African region.
Shoprite opened its first store in Nairobi on Thursday, at Westgate Mall, a site previously occupied by struggling Nakumatt, which has shuttered all but six stores in East Africa’s biggest economy. French retailer Carrefour, Walmart-controlled Massmart and Choppies Enterprises of Botswana are also seeking to fill space left by the debt-ridden company and state-backed Uchumi Supermarkets, which is facing a winding-up petition.
The 50,000-square-feet flagship store at Westgate is fitted out to the latest specification of Shoprite’s premium ‘Checkers’ brand. Shoprite, which operates more than 2700 stores in 14 countries outside of South Africa, promises a diversified product range and consistent value for shoppers in the Kenyan market.
The retailer has entered the country to strengthen its position in East Africa, with Kenya being the region’s strongest economy. Shoprite will open at Garden City in early 2019 and will follow up on other opportunities in the city as they become available, in addition to the potential for future expansion outside of the capital.
Ben Woodhams, Managing Director at Knight Frank Kenya, said: “We are delighted that Shoprite has chosen to launch in Kenya with the premium Checkers level of fit-out at the Westgate Shopping Mall, and I believe shoppers will be impressed by the quality of this fantastic new store – a real first for Kenya.”
Westgate Shopping Mall now has a Gross Lettable Area of 267,881 sq ft following the completion of Phase II of the restoration. The second phase of restoration opened officially for trading on October 16, adding over 82,000 sq ft to the shopping centre development. The shopping mall is built to the highest international standards and the development would stand out in any part of the world.
Westgate’s restoration added more internal exclusive roads and parking spaces in the shopping mall to now accommodate over 700 cars. The mall also has a street-style pop-up market and a children’s play area. Ashmi Shah, Retail Portfolio Manager at Knight Frank Kenya, said: “With Shoprite’s opening at Westgate Shopping Mall as the anchor tenant, together with some fantastic international brands, the mall will record further growth in footfall with its enriched shopper experience.”
Knight Frank Kenya also signed up Miniso for Westgate, which has opened alongside other flagship outlets for international retail brands such as Mango, Hugo Boss, Lacoste and Grill Shack in the newly added prime retail space.
With the recent signings, Knight Frank Kenya has established itself as the market leader in retail leasing, having been involved in all major shopping centre developments across the country for 20 years. The real estate consultancy also has the largest retail property management portfolio, including The Junction Mall, Garden City Mall, Rosslyn Riviera Mall, Cedar Mall Nanyuki, Signature Mall, Lunga Lunga Square, T-Mall, Ridgeways Mall, Capital Centre, Oasis Mall and Mtwapa Mall.
The firm was feted with five awards in the Real Estate Excellence Awards 2018, further cementing its position as the market leader. The awards were Best Retail Property Agents 2018, Best Retail Property Managers 2018, Best Commercial Property Agents 2018, Best Commercial Property Managers 2018 and Facilities Manager of the Year.