Kenyan supermarket chain Uchumi has announced a loss of Sh2.8 billion in its 2016 full year results for the year ending June 30, 2016. However the supermarket has bettered its position from the previous year by 17 percent when it suffered a loss of Sh3.4 billion recorded in 2015.
The Kenyan retailer cited multiple issues for its market catastrophe which includes closing of non-performing branches, supply chain problems and failure of its franchising model. The supermarket had to close down two of its branches in Kenya. Uchumi also had to let go its stores in Uganda and Tanzania (six and five stores respectively) where the franchising mode failed.
The management said that the total returns fell to Sh6.4 billion from Sh12.9 billion in 2015. Finance costs increased by Sh411 million in 2016 up from Sh335 million in 2015.
”The firm is focusing on turnaround strategy which include adoption of a franchising model, funding through shareholders loan, ICT improvement and supplier support,” said Uchumi management, in a statement.
Supermarket CEO Julius Kipng’etich said: “We have had to make tough decisions in order to ensure the continued survival and growth of the brand. We may not be out of the woods yet but we can certainly expect to start seeing positive results now as we work to revamp the brand. Discussions are ongoing with several potential partners and the board is hopeful that they will be concluded in 2017.”