Woolworths will embark on a price cutting strategy from August to win a share of the market that has been swept by the new shops set up across the region, offering quality clothes at cheaper prices.

The prices will come down by up to 30 per cent across all its markets including Kenya, Uganda and Tanzania.

It will also shift its businesses to shops as it faces inadequate availability of malls as it seeks to ride on bigger volumes to maintain its profitability even with the lowered prices.

The firm hopes to be successful in its pricing strategy, given its success in other markets. In its Australian market for example, after cutting price by 30 per cent, profits went up by 70 per cent.

“We seek to change the perception of buyers on Woolworths which is viewed as shops for the upmarket especially in Kenya our newest market,” said Ian Moir, Woolworths Africa Group chief executive in an interview with The EastAfrican.

It was his first visit to Kenya barely two months after the acquisition of the Woolworths franchise business owned by Deacons Kenya Limited by Woolworths (Mauritius) Limited.  The transaction led to an establishment of a new firm in April, Woolworths Kenya Proprietary Ltd to operate the brand.

Single commodities will go down by 20 per cent, he added, while bulks will go down by 30 per cent.

Woolworths Mauritius owns 51 per cent of the new Kenya company while Deacons takes 49 per cent.

Woolworths also plans to invest $10 million to increase its shops in Kenya from the current five to 20 in the next five years although availability of malls, its preferred point of investment, poses a challenge to the plans.

The firm however said it would start operations on smaller shops of 500 square metres as it seeks to compete with the established trend of a shops clothes flooded market.

Uganda is the most challenging to Woolworths of the three east African markets, where officials said formalisation of shops is a nightmare and has stalled the firm’s expansion plans.

The firm however said it would open four new shops in Uganda and Tanzania subject to availability of space.

Other plans by Woolworths to compete with the flooded clothes business shops across the region includes having staff carry out research on different markets demand to inform the choice of products including foods to be stocked under one shop. The uptake in the smaller shops will inform on whether to invest in larger ones.