Julius Kipng’etich leaves Uchumi Supermarket on its knees

Friday December 8 2017

Uchumi Supermarkets CEO Julius Kipng'etich resigned effective November 30, 2017. FILE PHOTO | NMG

Uchumi Supermarkets CEO Julius Kipng'etich resigned effective November 30, 2017. FILE PHOTO | NMG 

By MUTHOKI MUMO
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For most of retail chain Uchumi’s employees, the pain of seeing the company they have worked for die a slow and painful death is unbearable, making it difficult to talk about the subject.

When they do talk, most have a near-unanimous verdict on former chief executive Julius Kipng’etich’s term at the retailer: disappointing.

EMPTY SHELVES

“He has been here for two years and left us worse off than we were. When he came we still had food on the shelves,” said one employee, standing in an aisle that is empty of both products and customers.

The picture is the same in three city Uchumi outlets that the Business Daily visited in Nairobi. At Nairobi’s Aga Khan Walk, creative stacking does hide the fact that there is only one brand of water on sale. At Uchumi Koinange, an outlet that once served thousands of customers a day, there were only 10.

At Uchumi Jipange, on Thika Road, dust gathers in refrigerators where packets of fresh milk and yoghurt once sat. The supermarket is silent, the bustle of shopping replaced by the fluorescent hum of the lights and the quiet chatter of idle employees, waiting for customers, who will not come.

Mr Kipng’etich, who quit suddenly at the end of last month, went to Uchumi from Equity Bank in August 2015.

Based on his track record at the bank and before that at the Kenya Wildlife Service (KWS), there was high expectation that he would somehow work a miracle and pull the retailer back from the brink.

But the company was already steeped in a life-threatening mess, saddled by the combination of heavy debt and a cash crisis that needed fresh injection of billions of shillings to resolve.

LOANS

It was expected that help would come from the government, which is a major shareholder in the retail chain. But as most things government go, that cash has been slow in coming, making it extremely difficult for Mr Kipng’etich to stop the slide.

While Uchumi managed to cut losses by a margin of 39 per cent in the year to June, its auditors issued an unfavourable opinion.

The retailer is currently surviving on the hope that the government will come through with a loan it promised last year to help replenish Uchumi’s shelves, especially during this festive season. Employees and loyal customers have borne the brunt of this state of affairs in equal measure.

Uchumi paid its workers for the first time in three months this week, the Business Daily learnt. But November’s salary remains outstanding.  

Customers going into the supermarket often walk out empty-handed.

Agnes Kirinya, an administrative assistant in Nairobi, said she had been shopping at Uchumi for more than 30 years. But in recent months, the empty shelves have made it difficult to keep visiting the retail chain’s shops.

“The other supermarkets learnt how to do things from Uchumi,” she said, adding she has recently realised that loyalty cannot fill a shopping cart.

WOES

Uchumi is haemorrhaging customers every day to more nimble and better stocked competitors.

Ian Koech, a student at Multimedia University, says that he has now turned to “smaller retailers” near his Ongata Rongai home to meet his supplies needs. He sips from a bottle of Mountain Valley water that he bought at Uchumi only because he couldn’t find his preferred brand.

Competition in Kenya’s retail has intensified even as giant Nakumatt also battles a life-threatening crisis that has left it with empty shelves and forced it to close a number of outlets.

Uchumi Jipange sits opposite the bustling Naivas on Thika Road. Down the road, foreign retailers Game and Carrefour are running swift business.

But Uchumi employees retain a certain sense of hope. There are loyal customers who come again and again, especially for the freshly baked products that seem largely unaffected.

Perhaps if the loan from the government could be turned faster towards restocking, these customers will buy more than just a tea scone or a coconut macaroon.