Kenyan supermarket chain Uchumi has reveals plans to shift to a new franchise arrangement with 200 mini shops as part of its turnaround strategy, reports AllAfrica.com
The chain plans to use small branded shops that stock low-volume packed items to target the micro-market, while it seeks to regain its foothold in Kenya after undergoing financial difficulty.
At its recent 35th AGM, shareholders were also briefed on the retailer's plans to double its chain stores in three years, as well as consider international expansion.
Uchumi Chief Executive Julius Kipngetich told the shareholders that the new expansion plan has been designed to be cost-effective and capable of making returns.
"The old model of expansion was to build shops, which added to a fixed cost burden for Uchumi,” he said.
“The franchises we will venture into are partnerships where we will brand and supply our goods through the mini shops. It will not require any significant financial input with the consignment model, where the goods belong to the supplier until sold.”
© 2016 European Supermarket Magazine – your source for the latest retail news. Article by Jenny Whelan. To subscribe to ESM: The European Supermarket Magazine, click here.
