French retailer Carrefour plans to grow the number of branches to 9 from 7 in 2019 aiming to deliver quality, value and customer services through a family of conveniently located stores across Nairobi.
The expansion is the latest move by Carrefour, whose local franchise is held by Dubai-based conglomerate Majid Al Futtaim to get hold of a growing share of Kenya’s consumer spending.
According to Fitch Solutions, an industry-leading provider of credit, debt market, and macro intelligence solutions, and the primary distributor of Fitch Ratings content, “Consumer spending in Kenya is projected to tick up by 5.8% y-o-y in 2019, up from 5.2% y-o-y in 2018 due to the stability in the macroeconomic environment, lower levels of unemployment and rising incomes, over the medium term (2019-2023) we project real consumer spending to average 6.1% per annum.”
Areas the retailer is set to take up space include Kileleshwa in Kilimani, and Mega, a 40000 square feet space along Uhuru Highway.
“Carrefour is set to take up the retail space on Uhuru Highway which was previously occupied by Nakumatt, becoming the main anchor in that building,” said Franck Moreau, country manager, Majid Al Futtaim Hypermarkets Ltd during a media briefing on the retailer’s market update.
“When fully operational later in the year, the store will stock food and non-food items, and host some of our specialist sections such as fresh produce, groceries, a fresh bakery, as well as a butchery.”
Westlands and Kilimani have been rated by Cytonn Investments as the best performing retail nodes with average rental yields of 11.5% and 10.7%, respectively, as the areas are affluent neighborhoods hosting middle – high-end income earners with high consumer purchasing power and thus tenants are willing to pay higher rents for retail space in the area.
Moreau says with the conclusion of major refurbishment work at its Carrefour stores located in Village Market, Junction and Thika Road Mall (TRM), describes it ‘as a great feeling and concludes our entry into Kenya’.
“It has been exceptional to have a new fresh market for a foreign international company,” says Moreau adding that “Everything has not been easy, but that is part of our work. We currently, do not face any major issue. It is about our adaptability to understand customer habits and culture. It is a learning curve in adapting our business model concepts. The Kenyan market is about adapting not being rigid.”
The retailer says as it expands, its workforce is projected to reach 3000 from 2,100 by the end of the year. “We are open to all different options,” Moreau said. “If we have some information that some owner or group wants to sell, we are not closed, we will study it.”
Carrefour launched operations in Kenya three years ago and currently operates seven stores located at The Hub in Karen, Village Market, Two Rivers Mall, Thika Road Mall (TRM), Sarit Centre mall in Westlands, The Junction along Ngong road and Galleria Mall.
Globally, Majid Al Futtaim operates over 270 Carrefour stores across 15 markets and is actively seeking opportunities to open more locations in Kenya and the wider East African region.