Retail sales fall sharply as Covid-19 crisis hits market
Lewis Njoka @LewisNjoka
Business in the retail sector has reduced by over a third as the Covid-19 pandemic continues to erode consumer purchasing power amid calls for retailers to pay money owed suppliers.
The worst hit are retail businesses within Nairobi’s central business district (CBD) whose income has reduced by 60 per cent on average, double the rest of the country at about 30 per cent.
Retrak Chief Executive Officer, Wambui Mbarire, said things are getting worse for retailers as the government continues to restrict movement in a bid to fight the pandemic.
“Currently under Covid-19 business is extremely low. For people with branches in the CBD, business is down by 60 per cent, across the country business is generally down by a minimum of 30 per cent, and that is changing for the worse as we go through the curfew sessions,” said Mbarire.
Movement is restricted in and out of the Nairobi metropolitan area, Mombasa, Kilifi, Kwale, and Mandera in addition to a nationwide dusk-to dawn curfew.
This revelation comes at a time when the Competition Authority of Kenya (CAK) is pushing to have major retailers pay dues owed suppliers as required by law and has launched investigations to that end.
CAK Director General, Wang’ombe Kariuki, said the authority is probing possible contraventions of the Act in the retail sector through delays in payment of suppliers without justifiable reason.
“Pursuant to the law, 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,” he said.
The retailers, however, allayed fears that they were delaying supplier payment unnecessarily.
They said the CAK directive was a routine assessment and not an indictment of wrongdoing on their part.
“It is not because they (suppliers) have not been paid, CAK wants to assess the current status of the retail sector, that’s why they are carrying out that exercise.
“It is within CAK powers to look into the relationship between the retailers and the suppliers,” said Mbarire.
She said it was a continuous process of ensuring that people are adhering to the code of practice which the retailers signed a while back.
This, however, contradicts the position held by Wang’ombe, who in a recent interview, said the authority had information that some supermarkets were delaying paying their suppliers well beyond the agreed period and without justifiable reasons.
Prompt payment regulation enacted last year requires retailers to pay their suppliers within 90 days, failure to which one could be slapped with a Sh10 million fine or a five-year jail term.
It seeks to guard against accumulation of huge debts and end up unable to settle them as happened with Nakumatt Supermarkets which collapsed with Sh38 billion worth of debts owed to suppliers and creditors.
