After tightening its grip on the Kenyan retail market, French retailer Carrefour is taking over Shoprite’s business in Uganda as it increases its footprint in the East African region.
Majid Al Futtaim, the exclusive franchisee of Carrefour in the region, announced on Wednesday that it had agreed to a lease transfer deal for the South African retailer's stores in Uganda in an expansionary move that will boost its market share.
“The terms of the agreement see the transfer of Shoprite’s six Uganda store leases to Majid Al Futtaim by end of year,” the retailer said in a statement.
Majid Al Futtaim operates two Carrefour stores in Uganda. Under the agreement, Majid Al Futtaim will expand its footprint to eight Carrefour stores.
“We welcome the opportunity to bring our unique Carrefour offering of unbeatable value, range, international standards to more customers across Uganda,” Majid Al Futtaim Retail CEO Hani Weiss said in a statement.
“Majid Al Futtaim is fully committed to creating great moments for the communities we serve for the long-term. This agreement represents our continued investment in East Africa. We look forward to strengthening our offering in the region and supporting local talent through employment and career development opportunities.”
Majid Al Futtaim launched its first Carrefour store in Uganda in December 2019 at Kampala’s Oasis Mall, and in March 2021 opened its second store in Naalya.
The retailer said both parties will work closely together to ensure a smooth transition.
The six stores are located in Acacia Mall, Village Mall, Victoria Mall, Lugogo Mall, Clock Tower, and Arena Mall. As part of the agreement, the Lugogo Mall and Clock Tower properties will also transfer to Majid Al Futtaim.
Last month Carrefour opened its 16th outlet in Kenya at the Southfield Mall, in Nairobi’s Embakasi estate, shortly after taking over other Shoprite operations in Diani.
The supermarket chain is riding on a strategy similar to that taken by local retailers Naivas and Quickmart, both of which have been inheriting spaces left by collapsed retailers such as Tuskys and Nakumatt.
This is also besides frequent and huge discounts the retailer offers its clients, but which have been criticised by the market regulator, the Competition Authority of Kenya (CAK), on the basis that the retailer transferred the burden to suppliers.
And its strategies appear to be paying off even as many retailers in the country are left high and dry. Since early this year, the chain has reported that its sales in Kenya grew by Sh6 billion last year despite the Covid-19 pandemic.
The retailer reported total sales of Sh25.3 billion, up from Sh19.4 billion in 2019, a 30.2 per cent jump.
This comes weeks after Carrefour took over more space that was previously occupied by Shoprite, Tuskys, Nakumatt, Botswana's Choppies and South Africa’s Massmart (which operates Game stores) in an aggressive expansion that has given local retailers a run for their money.
Shoprite has closed its operations in Kenya as well, citing underperformance of its branches.
At its best in Kenya, Shoprite was the anchor tenant in three major malls, including Garden City and the Waterfront.
“Kenya, with three stores at year-end, has continued to underperform relative to our return requirements,” Shoprite said in its financial statements last year.
Carrefour was launched in the region in 1995 by UAE-based Majid Al Futtaim, the exclusive franchisee operating Carrefour in over 30 countries across the Middle East, Africa and Asia, and fully owns the operations in the region.
Majid Al Futtaim operates over 375 Carrefour stores in 17 countries, serving more than 750,000 customers daily and employing over 37,000 people.
Founded in 1992, Majid Al Futtaim has grown to employ more than 43,000 people. It owns and operates 29 shopping malls, 13 hotels and four mixed-use communities, with further developments underway in the region.
The shopping malls portfolio includes Mall of the Emirates, Mall of Egypt, Mall of Oman, City Centre malls, My City Centre neighbourhood centres, and five community malls that are in a joint venture with the government of Sharjah.
The company also operates an online store.