Nakumatt in talks to reopen Mlimani mall outlet
Tuesday October 24 2017
Regional retailer Nakumatt is holding talks with Mlimani City Holdings to reopen its branch in Dar es Salaam, Tanzania, The EastAfrican has learned.
A week ago, Mlimani City — the landlord of Nakumatt’s Dar es Salaam branch — closed the supermarket for failure to bring in new stock contrary to their rent agreement, as well as holding unpaid bills.
“Nakumatt management is holding negotiation talks with Mlimani City Mall management. We are hopeful that by next week our branch will be reopened,” said a Nakumatt official who asked not to be named.
According to Mlimani management, the Kenyan retail chain has been operating with nearly empty shelves for some time and also has three-months unpaid rent due to Mlimani Holding Ltd.
“Despite its favourable location at the mall, Nakumatt has not been operating well … inadequate display of stocks, which is against their rent agreement. On top of that, they have not paid rent for a period of time,” said Pastory Mrosso, Mlimani City general manager.
Apart from its Mlimani city outlet, the other four Nakumatt supermarket branches also have few products on their shelves, and suppliers claim they have not been paid for almost one year.
Nakumatt seems to be following in the path of Uchumi, another Kenyan retailer, which closed its operations in Tanzania two years ago, following an extended period of loss-making.
READ: Retailers exit Tanzania over profits
Uchumi Supermarkets, like Nakumatt, had empty shelves at its stores or they were filled with single-line products as suppliers stayed away due to lack of payment.
Nakumatt, with 45 branches operating in different parts of Kenya, eight outlets in Uganda, five in Tanzania and three in Rwanda, it has so far closed four supermarkets in Nairobi and five in Uganda.
In September, Tanzania’s Ministry of Industry, Trade and Investment reported a $704,881 debt that Nakumatt owes to its suppliers.
“Our data shows that Nakumatt owes its suppliers around $700,000. This may seem like a small amount compared with its debt in other countries, but most of its suppliers are small-scale producers, and the amount overdue means a lot to them,” said Adolf Mkenda, the-then permanent secretary at the ministry.
Senior government officials from Tanzania and Kenya had earlier agreed to work together to iron out Nakumatt’s challenges.
At a meeting in Dar es Salaam early last month, co-chaired by Adolf Mkenda and the Principal Secretary in Kenya’s Department of Trade Chris Kiptoo, he assured his Tanzanian counterpart that Kenya would do everything to ensure that the Nakumatt and Uchumi supermarkets flourished.
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