New Uchumi CEO outlines plan

Listed retailer, Uchumi Supermarkets, yesterday introduced the man who will be at the helm for the next three years. 

Mr John Masterten-Smith replaces acting CEO Kipng'etich Bett, and has been put on a performance-based renewable contract.

The troubled supermarket giant said it would in future draw up similar contracts for its employees.

"I am aware of the task ahead of us. I am not saying it is easy," Mr Smith confessed. The new managing director reported one of the key issues he would start by addressing was the level of inventory: "We are holding about double what we need." 

This situation has prevailed even as the level of stocking remained low. At present, it is estimated that the stocking is at 95 per cent although the situation is expected to change in one week. The supermarkets are anticipating their highest turnover in five months in October. 

Uchumi will focus on sales and address its costs, according to the new CEO.

Mr Smith has spent the last three weeks touring the Uchumi branches country wide. His work permit was issued last week and he assumes duty next Monday.

Yesterday, the directors present at a Press conference at the Industrial Area headquarters were again at pains to de-link the appointment with any potential strategic investor. The new CEO has worked for 20 years at the 400-plus store Score and Spar supermarkets in southern Africa. South African firms have been mentioned in relation to the strategic partnership. 

Managing director of Industrial and Commercial Development Corporation Munyiri Munene said that Uchumi would not go for a foreigner investor if it can raise the requisite amounts locally. He was accompanied by fellow directors chairperson Dr Eddah Gachukia, Mr Bett and top Uchumi managers.

The parastatal is one of the main shareholders in the chain. Others include ICDCI Investment and Kenya Wines Agency. The Government has substantial interest in both.

Uchumi is in the coming weeks seeking injection of some Sh1.25 billion, in part through a rights issue.

The board has said any strategic investor in the firm would have to retain domestic goods at 85 per cent on the shelves, have retail experience and be prepared to support the Uchumi brand. On the cash-flow, Uchumi said it had stabilised at 90 days of payment for suppliers and was now on normal cycle. 

Mr Bett said arrears for suppliers should have been paid latest by February next year. He replaced Mr Kennedy Thairu on a three-month contract as cash-flow problems brought the shops to their knees.