Retailer ventures into convenience stores market

Nakumatt will launch pilot outlets across Nairobi where the lower middle class and upper lower class are concentrated. The branded c-stores will be called Nakumatt Express.

Nakumatt enters market dominated by small scale entrepreneurs operating kiosks that are a common feature in many residential areas. The kiosks sell goods in small quantities and are known to work on credit paid at month-end.

Nakumatt Venturing into c-stores is way of spreading and reaching the lower end of the market at a time when the global economy is experiencing reduced consumer spending.

The retailer might reduce the prices to compete with other small scale stores because it enjoys economies of scale as it operates several outlets in Kenya and a mega store in Rwanda's capital - Kigali.

The first Nakumatt Express opens Friday, December 12 at Kahawa Wendani, north of Nairobi. and will be smaller, complementing Nakumatt Supermarkets and Hypermarkets.

According to a recent global research study by Research and Markets, hypermarkets remain the fastest growing retail format followed by convenience stores. The report titled: “Convenience Stores Market - Worldwide (2005-2008)” attributes, economic growth, technological advancements, rising income levels, changing consumer preferences and convenience as the major market forces for the convenience store industry.