Nakumatt To Shut Loss Making Outlets
Nakumatt Supermarkets has announced that it is undertaking a business restructuring exercise which will lead to closure of several unprofitable branches across Kenya and Uganda.
The retailer says this is part of a cost cutting strategy aimed at reducing its total cost base and streamline most of its operations of the struggling retailer.
According to Nakumatt Holdings Managing Director, Atul Shah, the company has began a new strategy that has been developed to provide a recovery platform for the firm and replaces the Nakumatt 2.0 strategy.
In order to cut costs, Shah said the firm reducing its store keeping unit (SKU) exposure by retaining frequently purchased items and delisting slow moving products.
“The branch culling strategy will start off with sub optimally performing branches for whose leases contracts are due for renewal to be followed by branches in poor locations,” shah explained, adding that, “We have also embarked on a shelf stocks optimisation programe to enable us retain a lean variety of profitable retail products.”
Nakumatt in Uganda last month shut down its Katwe branch over a rent dispute and according to the statement, many more branches in unfavorable locations and those whose leases are nearing an end will be let go.
Nakumatt has also put a freeze on new staff signings, saying they are “opting to absorb and progressively deploy staff from recently closed branches to its existing and upcoming outlets.”