Uchumi Is One of The Leading Supermarket Chains in Kenya

Uchumi is one of the leading supermarket chains in Kenya.
The company was formed in 1975

with the primary objective of enabling the distribution of products in Kenya through the creation
of retail outlets for manufacturers in the country.
Uchumi Supermarkets Limited (Uchumi) operates a chain of supermarkets and hypermarkets.
The product line of the company includes bakery products, wine, meat, fish, kitchen appliances,
furniture, home decoration products, vegetables, fruits, clothes, toys, radios, television sets,
home theaters and car stereos. Uchumi operates through 15 branches which include 11 in
Nairobi, 3 in Karatina, Meru and Eldoret, and one in Kampala, Uganda. The company is
headquartered at Nairobi, Kenya and employs over 1,000 people.
On 31st May 2006, due to financial and operational problems, the board of directors declared the
company insolvent and the Capital Markets Authority (CMA) suspended the Company’s listing
on the Nairobi Stock Exchange (NSE). From 15th July, 2006, the company commenced its
operations under Specialized Receiver Manager (SRM
SWOT analysis of Uchumi Supermarket
The following is the SWOT analysis of Uchumi
Strengths
 Online shopping cart that enables customers to shop via the internet and with the growth of
ICT would prove highly beneficial.
 Good customer service through their The Uchumi U Club loyalty scheme that aids them by
creating an avenue to help them understand their customers more and their preferences.
 They are a local retail brand therefore most customers being Kenyan are ready to support it.
 Established name brand that is identified with reasonable to cheap pricing and bargain
pricing.
 The organization deals in all types of goods from clothes to electrical items, from jewellery
to garden equipment and therefore caters to a wide range of individuals and needs.
 Suppliers attest that their professionalism is unique. Thus they have a high reputation
 Customers can redeem their points which they earn from using their Uchumi cards any time
they want but not at designated periods.
 They have an unrivalled focus on customer service.
Weaknesses
 The slump they underwent prior to 2006, they were overtaken by Nakumatt and Tuskys and
thus they rank third in number of outlets and sales volumes.
 The near collapse two years ago caused by, among other things, an expansion programme
financed by short-term capital may have put potential investors at bay.
 They do not offer a wide range of products as compared to their close competitors Tuskys,
Naivas etc.
 They have avoided market segmentation which could prove useful when it comes to
differentiating prices.
 Staff turnover-losing staff to rival competitors.
Opportunities
 The market for modern trade (supermarkets) is increasing. With so much potential sites for
new branches in different parts of the country and regionally in East Africa and Southern
Sudan, the graph can only curve upwards
 Regional markets in East African Community thus increasing their market share.
 There is also the promising growth of the economy, estimated at 6% this financial year which
will mean growth in employment and thus more disposable income.
 They could also offer 24hr services to increase sales revenue
 Technological platform for goods and services where suppliers acquire space and strive to
meet required standards.
 The uchumi brand establish its niche and market itself in order to increase customer numbers
that can be leveraged on volume to lower supply chain costs.
 Maintaining low costs and continuous supply plus prompt payments to suppliers, the benefit
is it attract quality suppliers, discourage carrying of dead inventory
Threats
 Competition from competitors like Tuskys, Nakumatt, Naivas that have a higher market
share and customers.
 Competition from other smaller shops, online shopping
 Mismanagement which once led to their shortfall.
 Cash flow and liquidity problems which limit expansion.
 Increase in cost of productions.
 Product recall.

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Uchumi Is One of The Leading Supermarket Chains in Kenya

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Uchumi is one of the leading supermarket chains in Kenya.

The company was formed in 1975

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