Shock, anxiety grips Uchumi workers and suppliers after outlet closure

Security guards at the closed Uchumi Supermarkets Embu branch on March 21, 2016. Uchumi Supermarkets closed down five loss-making outlets in a restructuring plan. PHOTO | CHARLES WANYORO | NATION MEDIA GROUP

What you need to know:

  • Over 80 employees had been told they were going on leave before the closure.
  • The branch employees are not sure if they will be absorbed in other branches.
  • Suppliers have also been hit hard by the closure.

Shock and anxiety have gripped Uchumi Supermarkets’ Embu branch workers as their fate hangs in the balance following the closure of the branch on Monday.

The Nairobi Securities Exchange listed chain announced it was shutting down loss-making outlets in Embu, Eldoret, Nakuru, Kisii, and Nairobi’s Taj Mall.

Before the closure, the over 80 employees said they had been informed that they were proceeding on leave but were not told whether they would be absorbed in other branches.

“We had been given a 21-day notice but before the notice elapsed, we were told to proceed on leave,” said an employee who didn’t wish to be named so as not to antagonise the employer.

A notice at the supermarket door announced that the branch had been closed “in order to focus on a leaner structure as indicated by our current business environment.”

Tens of shoppers were shocked to find the store closed with many calling on the government to intervene and revive the branch. The branch has been operational for about two years and had late last year laid down 50 employees.

SUPPLIERS HIT HARD

Suppliers have also been hit and having had their contracts terminated late last year before they were recalled without any written agreement.

According to Mr Jamleck Mugane, who has been supplying the furniture at Embu branch for two years, said he was only notified of the decision to close down the branch in the morning and told to remove his items within four hours.

“Sometimes last year, Uchumi had given us a 21-day notice to vacate but later recalled us. We were told that there were wrangles over high rent with the owner,” said Mr Mugane.

Mr Mugane said they would incur losses since they had tailor made items for the Embu branch.

“We have been supplying goods manufactured in Kenya and the government should protect us as suppliers. We come up with designs and make them personally. The government should intervene to ensure we don’t lose money that we are owed,” he said.

A local businessman, Mr Moses Wamuru, said the woes facing Uchumi could be traced to corruption and urged government to probe how money allocated for the chain’s revival was used.

“They were given billions of taxpayers’ money to revive the retail shop but it appears the money was never used properly,” Mr Wamuru complained.

Mr Wamuru said the closure had dealt a big blow to farmers in Embu and Kirinyaga counties who supplied various items there.

“When you hear us raising issues over corruption in the government, it is not that we are fighting it. We are just alerting the government to close the avenues where the money is getting lost. It is a shame to see a chicken thief jailed for long sentences yet those stealing public funds are never touched,” said Mr Wamuru.

The firm's chief executive Julius Kipng’etich defended the shock move even as the loss-making retailer is implementing a growth strategy, saying it “is well on track to recovery” and that the decision is expected to hasten the chain’s rise to sustainability.