Nakumatt Holdings have, in keeping with global standards, bagged a string of internationally-recognised awards and certifications, confirming worldclass superiority.
Some of these include:
• The Price Waterhouse Coopers East Africa Most Respected Service Sector Award • Kenya Bureau of Standards ISO 9001:2000 Quality Management System • Planet Retail Global Ranking • East Africa Superbrand • GCR Credit-rating
Best of Kenya iinterviewed Nakumatt Managing Director Atul Shah. Excerpts:
Q: How old is Nakumatt and how would you describe the story ofthe supermarket so far?
A: Nakumatt was born out of Nakuru Mattresses. Nakumatt is short for Nakuru Mattresses. Nakuru Mattresses was registered in 1965. We took over the business in 1978 and we were only in Nakuru and Eldoret until 1987 when we set up a small store in Nairobi on Ukwala Street. Then it was known as Nakuru Mattresses, Nairobi. In 1991 we had our first branch.
This was the first so-called hypermarket or supermarket. It was small; only 4,500 square feet. This is what is Nakumatt Mega today and which is approximately 125,000 square feet. So, just like babies grow so has this store.
At the moment we have 28 stores in Kenya, three in Uganda and one in Rwanda. This year, we plans to put up one more in Rwanda, one in Uganda and at least four more in Kenya. So, six stores are planned to be operational this year.
Q: You haven’t mentioned Tanzania.
A: We will open our first store in Tanzania in June in Moshi. Why Moshi? Because development in Dar-es-Salaam was stopped, so if it gets underway again then we will have a branch in Dar next year. We will also have a branch in Arusha where we have already identified a site. Bujumbura is the next stop, then Juba.
Q: That’s rapid expansion.
A: No, that’s opportunity. Yes, we have gone through financial issues because of expanding too fast, but the cost of opportunity was higher. We had some financial issues but we have now recovered. The banks have supported us; one of the banks thought we were expanding too fast, but they did not reckon with the opportunity value. All the banks have realised the opportunity value that we espouse.
When a location is available, you don’t begin asking questions about when because the location is there and then. If you look at Nairobi, we have three circles; the CBD, then the middle circle where we have Nakumatt Mega, Nakumatt Junction and Westgate and the outer circle in which you find us in Embakasi, Galleria, Karen and Village Market. Kiambu Road is coming this year, and the new Thika, which is due next year. The three circles cover Nairobi very well; take any road out of Nairobi and you will find us.
Q: What would you attribute the success of Nakumatt to?
A: We are successful because Nakumatt is one big family. We have 4,700 people working with us in Kenya. We are all concerned about how Nakumatt can be even bigger and better. Everybody here, apart from a few professionals, has grown from, say, a shop attendant to become a manager, or a driver to become a manager, or a turn-boy to become a supervisor. Nakumatt is therefore something everybody is attached to; everybody looks at it as their own; to which they belong.
ourselves to, and adopt the requirements of our shoppers and given them the most attractive and cleanest environment in which to shop, in the right locations and everything that goes with customer requirements and satisfaction. We also appreciate that our customers have been very supportive. Our suppliers have also been very supportive because when we started looking for better-looking stuff and bar codes; when we demanded world class products and standards for goods and packaging; local manufacturers rose to the challenge and continue to give us world class quality.
Q: When you talk of 4,700 employees, that’s the number you employ directly?
A: That’s the number for Kenya. We are 5,000 as an East African family.
Q: How many suppliers could you be talking about?
A: The suppliers we deal with on an inand- out basis daily will be about 700. Out of these, we have supported about 150 suppliers from being cottage industries to significant manufacturers.
Q: Nakumatt stores are found mainly in shopping malls. That’s deliberate I think, what’s the reason for that?
A: Yes, our stores are in shopping malls. There is a lot to do in shopping malls and many people will be found in such places, but if we were stand-alone businesses perhaps there would be times when we would not have many shoppers. There is a lot to do in shopping malls for anybody and everybody to be there.
Q: Is location everything?
A: Ninety per cent of your work is done if you have the right location. If you stay in Karen, for example, you can shop at Nakumatt Junction, Nakumatt Karen, Nakumatt Prestige, Nakumatt Mega, Nakumatt Galleria; you have a choice depending where you are, going or coming from.
Q: Looking at your investment across East Africa, how much money are you talking about? Are you getting a return on your investments?
A: The returns on setting up a good hypermarket is about eight years; the returns on setting up a supermarket would be about six years; to set up a convenient store, like UKay, would be between three and four years. So it depends on the class of supermarket you go for, but, of course, we are going for a mixture of all three.
Of course, the 24-hour stores have been very successful, because congestion in Nairobi and the pressure of time led us to think about convenient shopping hours. This would have meant staying open up to midnight or 2 o’clock, but then there are issues of unavailability of public transport to take staff at home at that time of the night.
So we opted for 24-hour shopping. Our busiest time is between 9 pm to 1 am. This is the biggest basket value time. Families come to shop at this time. They have time on their hands; there is no pressure on them; there is no work; there is no traffic, there is no congestion. Twenty-four hour shopping has helped bring families together.
Previously we would close our stores at 8.30 pm and there would be many customers at the doors pleading to be allowed in because they were held up in traffic. So we made a deliberate decision to alleviate the suffering of our customers because traffic snarl-ups and congestion are not their fault. We are happy to note that the government is tackling infrastructure to make mobility easy.