Mwai Kibaki was Kenya’s longest-serving Finance Minister, holding the position from 1969 to 1982. It was during his leadership that Kenya adopted an import substitution policy, in short, it actively protected local industries from foreign competition. This approach mirrors Trump’s trade policies, though under vastly different economic and political conditions.”
Back to Kibaki. Part of this policy entailed agro-processing because it recognized that Kenya was (and still is) an agriculture-based economy. This is where the idea of a supermarket chain was mooted.
In 1975, Uchumi Supermarkets was established by three state agencies: the Industrial and Commercial Development Corporation, Kenya Wine Agencies Limited, and Kenya National Trading Corporation.
The purpose was to give manufacturers an outlet to sell their products and it was successful on many fronts. Many SMEs that would deliver products via bicycles and mikokotenis gradually grew to deliver their goods in lorries. Their fates and that of Uchumi Supermarkets grew together like Siamese twins.
Uchumi Supermarkets also played a key role in the development of shopping malls. It was the anchor retailer for Sarit Centre Mall for close to 30 years and as it expanded so did other retail chains. It introduced the specialty shops concept that saw Bata and White Rose Drycleaners housed within the supermarket’s branches.
Even former CEO Jonathan Ciano once said that they were the first to package Omena and sell it at their stores.
Collapse and the after-effects.
But as with all Kenyan companies, especially those that have government ownership, corporate malfeasance, theft, and plunder were expected. The first major collapse occurred in 2006 when it shut its doors after 30 years.
A government bailout saw it bounce back but a decade later it was back in financial straits. So bad was the mess that the then Jamii Bora Bank CEO Samuel Kimani described the retail chain’s book of accounts as “works of fiction.”
Jamii Bora Bank and an affiliate company Goodwill Ltd were at the time the largest shareholders with a 15.8% stake, followed by the government at 14.67%.
Uchumi Supermarkets’ fall would have a ripple effect on many others. KCB, UBA, and the Co-operative Bank made billions of losses. Suppliers, landlords, and employees completed the misery.
Indirectly, the collapse of Uchumi Supermarkets continues to have a long-term effect.
In the absence of an “impartial” retailer, many suppliers and landlords will be at the mercy of incumbents who continue to consolidate their chokehold on the formal retail space.
Let us explain a bit more what impartial means. Unlike other retailers, Uchumi Supermarkets was a public company which in the words of former CEO Mohamed Mohamed meant that you did not have to be connected to become a supplier or an employee due to its corporate governance structures.
Related Content: The Fall Of Uchumi Supermarket: Deals, Disputes, And A Billion-Shilling Battleground
It is quietly acknowledged that in other retail chains, the most profitable products are often supplied by the owners’ families and friends, who also own many of the rental premises where the chain’s stores are located.
It gets murkier. Every year there are numerous complaints to the Competition Authority against the supermarkets for market abuse. Carrefour is the most notorious having been fined a record KES 1.1 Billion fine in 2024 for making suppliers suffer through all manner of punitive requests.
Backed by billions in private equity, these retailers are poised for further consolidation. This will amplify their ability to squeeze suppliers and underpay workers, all in relentless pursuit of the EBITDA holy grail. Uchumi Supermarkets was the only buffer but now that it has collapsed, this buffer is gone.
As for the 17 acres of land it owns in Roysambu and the three in Langata, it is not clear if or when the plots will be sold and whether suppliers will ever get a dime. The 17 acres are in jeopardy following the land grab by the KDF, a matter in court.
Whatever the outcome, the loss of Uchumi Supermarkets will have legacy effects.
Related Content: The Battle To Save Uchumi Supermarket: Squatters With Guns And The Land Battleground
