Nairobi News

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How supermarkets are killing the once famous duka

Kenyans are increasingly doing their shopping in supermarkets, continually edging out local dukas that were for long the mainstay of the retail sector in the country.

A survey by mobile phone-based pollster GeoPoll on consumer spending habits shows that Kenyans are spending more this year than in 2015, with 56 per cent making a visit to a supermarket compared to 35 per cent who shopped at a kiosk.

The poll, done over one weekend in January, sampled 500 consumers — with every county represented — of whom 58 per cent said that they would prefer Kenyan made goods to imports where available.

In comparison, a smaller percentage of shoppers in Nigeria polled in a similar survey said they would opt for local goods, while in South Africa the ratio was higher than Kenya’s.

“We found that in all three countries, people are spending more this year than they were this time last year.  We also find a preference for locally made goods, with 58 per cent in Kenya, 47 per cent in Nigeria, and 63 per cent in South Africa saying they prefer to buy goods made in their country.” Said Geopoll in their survey.

Kenyans also reported that they are more likely to purchase food, while Nigerians and South Africans purchased clothes and cosmetics more often than Kenyans.

EVOLVING HABITS

The poll shows the evolving nature of Kenyan consumer habits, with access to larger supermarkets going up as the competing chains open more branches closer to residential areas and malls come up across major urban centres in Kenya.

A growing middle class is also pushing the shift towards the more formal outlets as they demand higher end products and insist on variety.

According to global consultancy Oxford Business Group (OBG), Kenya has the second most formalised retail sector in Africa behind South Africa. It accounts for between 30 and 40 per cent of the market, compared to South Africa’s 60 per cent.

OBG, in its Kenya 2016 report, says that devolution has increased the opportunity for formal retail chains to expand their footprint outside Nairobi as income rises in the counties.

“Kenya’s domestic formal supermarket segment, which includes a number of formidable local firms that maintain an important regional presence, most notably Nakumatt, Tuskys, Naivas and Uchumi, has expanded significantly since 2012.

Several small retailers including Mulleys & Sons, GreenMart, QuickMart Maathai Supermarket, EastMatt and CleanShelf are in the midst of ongoing expansions,” said OBG in the report.

NEW PLAYERS

French retailer Carrefour and South African retailer Massmart (Game) have also come into the market, taking up space in the upcoming Two Rivers Mall and at Garden City mall respectively, while Botswana retailer Choppies plans to take over Ukwala Supermarkets.

Local supermarkets have also expanded their product range, offering products such as fresh vegetables and cooked food in delis, products previously not found in such outlets.

The changing consumer habits are being driven by the growth of the economy, which has translated to higher purchasing power for the average Kenyan.

The average annual growth rate of Kenya’s gross domestic product (GDP) was 5.6 per cent between 2009 and 2014, while the GDP per capita doubled in a decade from $621.28 in 2005 to $1,246 in 2014.