Dar es Salaam. The die is cast. Last week’s official opening of Nakumatt supermarket in Dar es Salaam marked what is likely to shape into a scramble for the Tanzanian consumer market between two of East Africa’s leading retail giants.
Nakumatt’s launch of Mlimani City brings the competition with Uchumi Supermarkets closer to home, with a promise for an exciting shopping experience among local consumers.
And signs for the impending stiff competition between the firms that are also dominant in neighbouring Kenya and Uganda are not very difficult to discern.
Barely three days after Nakumatt replaced the hitherto Shoprite mega store along Sam Nujoma road in a high profile function, Uchumi pulled a rabbit from the hat.
With already more footprints in the country, Uchumi is in a hurry to consolidate that position, eying to raise its branch network to 10 stores by December this year, bringing the supermarket experience closer to target populations in major cities besides creating hundreds of new jobs.
According to Mr Ciano, they have planned to open three new branches in Dar es Salaam and one each in Morogoro, Arusha and Mwanza over the next four months.
Uchumi has currently its dominance in Dar es Salaam, with Quality Plaza, Segerea, Makumbusho and Shekilango as its early outlets. Uchumi would like to replicate the Dar scenario in the next frontiers in the other regions in anticipation of a Nakumatt challenge.
Already with a successful branch in Moshi city that was its very first in Tanzania, Nakumatt has announced it will soon be rolling out into Arusha, almost around the time that its rival will also be setting up base in the northern zone, with Arusha as its entry point.
Tanzania is playing out as the perfect ground for the battle between the supermarket chains whose competition is alive in Kenya and Uganda, with both also having opened at least a store each in Rwanda’s capital, Kigali.
Burundi is also on their radar, but Dar apparently offers a fertile ground with a huge potential in market penetration, with the rapid rise in population with signs of a burgeoning class of middle class consumers.
Nakumatt’s planned Arusha store will bring its regional branch network to 50. It will soon open the former Shoprite branch in Dar es Salaam at Kamata along Nyerere road.
In Uganda, Nakumatt has eight branches so far, slightly eclipsing Uchumi which has a six-branch network since its entry in Kampala over a decade ago.
Uchumi which was in the doldrums towards the late 1990s turned the tide with a regional expansion plan that brings its established network to 33 branches. Kenya still remains firmly in Uchumi’s hold as the second largest retailer, with four of its planned eight new branches opening there. Tanzania will have three and Uganda one.
The importance of the new market frontiers is not lost to the two giants as reports show that competition for the Kenyan pie could get even more stifling, with South Africa retail giants namely Edgars, Foschini and Massmart said to be each plotting an entry there. It will remain to be seen if these three succeed where many South African firms have failed to have a foothold in the past.
Like in Kenya, there is enthusiasm that Tanzanian and Ugandan retail and wholesale sub-sectors could in the next few years match that of EAC’s leading economy. Tanzania’s economy whose growth has recorded a steady seven percent rating is cited as a positive indicator.
Kenya’s economic survey for 2012 showed that its retail and wholesale sector grew by 19 per cent, the second fastest mover of the local economy after transport and communication. The trend may not be very far from its EAC peers, perhaps explaining the positioning of Nakumatt and Uchumi.
Nakumatt Holdings Managing Director Mr Atul Shah believes there was a whole world to explore, noting that market strategy, consumer convenience and satisfaction will win over competition.
Mr Atul promises a good experience for Tanzanian consumers going forward, as the market penetration in the region was still very low, at between 14-18 per cent.
Nakumatt serves some 200,000 customers daily while Uchumi’s number is put at over 80,000 daily.
Uchumi CEO, Mr Ciano on his part also triumphs his firm’s leading example to enlist in the EAC’s established stock exchange market, in Kenya, Dar, Rwanda and Uganda.
The firm is listed in the three countries and will soon cross-list in the now opened Dar bourse. Mr Ciano sees this too as a means to empower the EAC residents and give back a portion of the company to its faithful clients.
Both the retail giants too say they have plans to ensure they help Tanzanian suppliers and small retailers grow along with them. That local supplier aspect is one advantage that EAC firms apparently have over foreign rivals who set shop here but only target a small group of high end spenders.
Currently, Uchumi for example says it has 450 local suppliers who bring fresh goods, suitable mainly for local consumers.
Both Uchumi and Nakumatt CEOs separately told The Citizen they viewed each other positively and do not fear each other’s declared resolve to conquer the Tanzanian market.
Mr Chris Lenana, Uchumi’s Country Manager in Tanzania for one believes the coming of Nakumatt in the local market will only bolster the commitment to deliver on their promise.
“We have respect for each other but only the consumer sets us apart,” noted Mr Shah.
The Citizen
The Citizen
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