Retailers hopeful in dull market
Wednesday, September 30th, 2020
- Trends characterising the sector reveals mixed fortunes with subsequent exodus of suppliers, unhappy over unpaid bills, tedious business permits left empty shelves in key retailer’s stores, as losses mounted.
- Supplier debt, coupled with a drop in business in the retail space, occasioned by Covid-19, has in the last two months threatened its business with the retailer forced to close some branches on reduced cash flow.
Steve Umidha @UmidhaSteve
Retailers are banking on accelerated growth in the next 12 months, buoyed by the gradual reopening of the economy and return to normalcy, to gain traction for growth.
The Retail Trade Association of Kenya (Retrak) in its Retail Industry Outlook Survey 2020 released yesterday projects modest growth in the months ahead, despite pandemic shocks pushing key players like Tuskys to near insolvency.
The survey conducted mid this year says majority of retailers are optimistic of future growth while a good number also plan to open additional stores and business units.
Others want to venture into e-commerce to complement their brick and mortar stores.
An estimated 47 per cent of retailers who took part in the survey are predicting constant growth with expansion of new branches projected to grow at 32 per cent for different retail subsectors.
The survey further found that majority of the retailers at 41.18 per cent will maintain the same number of stores but may compliment their excising stores with an online presence – while a quarter of the respondents, at 20.59 per cent will close some stores compared to some 11.76 per cent who said they were unsure of the future.
“These findings convey the message that the current retail sector is growing despite the poor economic conditions, inflation and now compounded by Covid-19 pandemic, thus retailers are opening new stores to avoid industry shake-out,” said Retrak’s Chief executive Wambui Mbarire — whose organisation comprises of 91 retailers across the country.
The report further notes that the prevailing Covid-19 pandemic will force most retailers to meet changing consumer demand for e-commerce adoption which has been on the rise as out of 42.4 per cent of retail businesses are without an existing e-commerce store.
Kenya’s retail sector has expanded by 13 per cent hitting the all-time high in terms of spending by 1.8 trillion shillings, since 2016 according to a survey conducted by Proctor and Gamble.