- 22nd April 2020
- Posted by: damian.shore
- Categories: Retail, SagaRetail News, Carrefour, Africa, Supermarkets, Kenya
Carrefour’s Kenyan stores earned revenue of KES18.7 billion (USD175 million) during 2019, up 28% on the previous year. The Carrefour banner is franchised in Egypt and East Africa by UAE-based Majid Al Futtaim (MAF). While MAF did not open any new Carrefour stores in Kenya during 2019, it did expand the sales areas of some of its existing ones.
The first Carrefour store in Kenya opened its doors in 2016, and it currently operates seven hypermarkets and supermarkets in the country, all of which are located in Nairobi. These outlets range in size from 2,500m2 to more than 10,000m2. Plans to open an eighth store in the city are currently on hold due to the Covid-19 outbreak.
The first Carrefour outlet in Uganda opened last year, while a supermarket in the Tanzanian capital of Dar es Salaam is due to open in the near future. However, it would not be a surprise if this was also delayed.
The Sagaci Retail View: In less than four years, Carrefour has established a strong position in the Nairobi market, due in part to a concerted marketing push to establish the chain as the cheapest place to buy such staples as rice and maize flour (even if its aggressiveness in dealing with suppliers has attracted some regulatory attention).
However, all of Carrefour’s Kenyan outlets are located in malls, and this weakness is now being exposed by Covid-19. With Kenyans subject to a night-time curfew in an effort to slow the spread of the disease, foot traffic in local malls has been severely curtailed (South African rival Shoprite recently closed a supermarket in the city’s Waterfront mall for this reason). According to Google Mobility data, visits to retail and recreation venues (such as malls, cafés, restaurants, and cinemas) in Kenya were down by almost half (47%) over a three-day-period during mid-April, compared with earlier in the year.
Local chains like Naivas, Tuskys and Quickmart are generally less exposed in this regard, as they tend to have smaller outlets that are located closer to residential areas (although Naivas and Tuskys also have many stores located in malls).
It will be some consolation to MAF that, having signed a partnership agreement with online retailer Jumia almost 18 months ago, Carrefour is at least better placed than most of its competitors to exploit the Covid-19-inspired shift to online shopping that is currently underway in Kenya.
If you want a deep dive into Carrefour’s expansion, operations, growth strategy across Africa, you may be interested in our Carrefour Retailer Research Report