Retail Sales in Nairobi Drop by 60 pct, but e-commerce Sales Rise

Retail Sales in Nairobi Drop by 60 pct, but e-commerce Sales Rise

Naivas Supermarket, Kilimani Branch

The coronavirus pandemic has caused retail sales in Nairobi to drop a record 60 percent according to the Retail Trade Association of Kenya (Retrack).

Across the country, the decline is about 30 percent.

“Currently under Covid-19 business is extremely low. For people with branches in the CBD, business is down by 60 percent, across the country business is generally down by a minimum of 30 percent, and that is changing for the worse as we go through the curfew sessions,” Retrak Chief Executive Officer, Wambui Mbarire says.

In a past interview with CGTN Africa, Daniel Githua, Chief Executive Officer, Tusker Mattresses Ltd (Tuskys) said formal retail sales had declined by 20 percent in April.

According to Githua,  “What we have seen, there is a decline of about 20 percent, especially in April. March was very strong because of panic shopping.”

“It is much more severe for the fashion retailers,” he said.

Further, Knight Frank’s  Kenya Property Market Outlook for quarter one ending March, said the retail sector ‘is perhaps the most significantly affected in the property market’ owing to the reduced foot traffic to major malls.

“However, anchor tenants that provide a one-stop-shop for fast-moving consumer goods, have been witnessing a steady stream of footfall as Kenyans visit the spaces to buy essential goods during this time. Pharmacies and leisure traders selling indoor and outdoor exercise equipment such as bicycle shops have also had a steady stream of shoppers,” states Knight Frank.

The report further indicated that some retailers are fast-tracking their online presence as they look to find new ways of reaching their consumers.

For instance, Tuskys has partnered with Sendy, a Kenyan startup that operates an app linking delivery drivers with customers, for home deliveries under the ‘Stay in, shop safe’ campaign.

On the other hand, Naivas Supermarket has partnered with Glovo to deliver to their customers.

Oversupply, Tough Economy Continue to Push Down Retail Rents in Kenya

CASH FLOW CHALLENGES

“In the short term, some landlords have been considering rental concessions on a case by case basis as they understand the difficult situation, and are exploring ways of preserving their cashflows through service charge management and considering turnover based rentals,” notes Knight Frank.

Due to the substantial slowdown of various businesses within retail centers, Tuskys has consolidated some of its branches to implement social distancing, and personal hygiene measures better.

The Competition Authority of Kenya (CAK) is currently investigating the possible abuse of Buyer power through delays in payment of suppliers without justifiable reason.

“The Authority is requesting local suppliers owed by major retail supermarkets beyond a credit period of 90 days from the date of supply to submit information to the Authority,” says Wang’ombe Kariuki, the Director-General CAK.