This development will stir competition in the country’s retail business
Kampala, Uganda | ISAAC KHISA | Carrefour franchisee in the Middle East, Asia and Africa, Majid Al-Futtaim, has opened a store in Kampala, stepping up competition for shoppers in the country’s lucrative and less developed retail chain industry.
Majid Al-Futtaim, which operates more than 285 Carrefour stores in 30 countries across the region, opened the maiden Ugandan outlet at the Oasis Mall, located along Yusuf Lule Road, at cost of $4million (approx.Shs15bn).
The store covers 2,800 square meters, stocked with 20,000 products sourced locally and internationally to meet the needs of different customer segments.
The retail chain also plans to open another outlet at Metroplex Mall in Naalya and will add three more outlets in the next five years.
Hani Weiss, the chief executive officer at the Majid Al-Futtaim, said Carrefour’s launch in Uganda is an integral part in the retailer’s long term ambition of strengthening its presence in the East African region.
“Carrefour is here to modernise the grocery retail sector by bringing international best practices and delivering the best value products to our customers, as we look to realise our vision of creating great moments for everyone every day,” he said.
He said the retail chain has introduced reusable shopping bags that are exchangeable for free for life.
“The objective is to push consumers to adopt reusable bags and bring damaged bags in our store,” Weiss said.
Uganda has in the recent past three years become a hotbed for expansion of retail chains following the exit of two giant retail chains – Nakumatt and Uchumi.
South African retail chain, Shoprite, which had two stores has expanded to five stores in Kampala and Entebbe.
Quality and Mega supermarkets, which had two outlets each in Kampala and Wakiso, have all expanded to four and three stores, respectively.
New retail chains have also sprung up including the Chinese owned Shopping Union at Kingdom Kampala and Urban Supermarket at Kooky Towers Opposite Central Police Station.
The United Arab Emirates based retail chain also operates seven outlets in Nairobi since its entry into the Kenyan retail market in 2016.
Presiding over the official launch, Amelia Kyambadde, Uganda’s Minister for Trade, Industry and Cooperatives said the country’s growing population, coupled with a vibrant economy will support Majid Al Futtaim’s growth.
“With rapid urbanisation, there is an increased demand for superior and high-quality products offered at great value, and we are very confident that in Majid Al-Futtaim, we have the right partner,” she said.
“By building the capacity of local suppliers, Majid Al Futtaim is encouraging value addition which will in turn help to boost household incomes. This supplements the government’s job creation efforts.”
Kyambadde said that by buying from local suppliers, Majid Al Futtaim is also helping to strengthen the government’s ‘Buy Uganda Build Uganda’ policy and that they will continue to support companies that promote inclusive growth in their operations.
Economic analysts that spoke to The Independent earlier said Carrefour is likely to succeed in Uganda once it capitalises on the growing economy that has an increasing number of the middle class.
The analysists also said the growing population is also expected to support the growth of retail chains.
Currently, Uganda’s population stands at more than 34million people while the economy has been growing at an average of 5.5% over the last five years, according to the Uganda Bureau of Statistics (UBOS) data.
Carrefour, in June last year, reported higher first-half profits and said it was on track to deal with a strategic overhaul aimed at boosting earnings and tackling competition from the likes of Amazon.
The retail chain’s operating profits rose 2.6% from the same period last year to 618 million euros (US$690 million).
Carrefour had a 282 million euros improvement in cash-flow, while recurring operating profits at its competitive, key home French market rose by 6 million euros to 116 million.
The retail chain said it was sticking to the financial targets laid out in its ‘Carrefour 2022’ plan, which also includes expanding into convenience stores to cut its exposure to large hypermarket stores and having more organic products and private labels.
Those targets include a cost-reduction plan of 2.8 billion euros on an annual basis by 2020, having 5 billion euros worth of e-commerce food sales, and the disposal of 500 million euros worth of non-strategic property assets.
Founded in 1992 with business activities spanning shopping mall, communities, retail and leisure pioneers, Majid Al-Futtaim partnered with the French multinational retailer Carrefour in 1995 to introduce the brand in the Middle East, Asia and Africa.