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Kenya's oldest retail chain mulls regional expansion

Xinhua, January 16, 2015 Adjust font size:

Kenya's oldest regional retail chain, Uchumi Supermarkets, plans to increase its branches from 37 to 50 across East Africa region as part of its expansion strategy for 2015.

Uchumi Supermarkets CEO Jonathan Ciano said the retail chain will in the course of 2015 continue implementation of its growth strategy both in Kenya and the region.

"By December, we expect to have 50 branches from the current 37. Most of these are in highly lucrative areas," he said in Nairobi.

The retail chain raised about 10 million U.S. dollars late last year in additional capital to finance its regional growth and expansion program as it seeks to consolidate its position in regional markets.

The Rights Issue had been oversubscribed by 84 percent, attracting 180 million dollars, which Ciano noted was an indication of investor confidence.

The new shares started trading on the Nairobi Securities Exchange on Jan. 8. Ciano said the funds will enable the company to grow its branch network in Kenya, Tanzania, Uganda and Rwanda and also refurbish existing outlets.

Over the last financial year, the chain opened eight new branches, bringing its total branch network to 37. There are plans to open three new branches in Rwanda this year.

"We expect to continue with the growth of the business as the new outlets are mature. We have adopted cautious strategic growth approach in the Eastern African region, an initiative that will be fully supported by the proceeds of the Rights Issue and the positive effect of cross listing in the EAC countries," Ciano added.

"Uchumi shares are now trading in Kenya, Rwanda, Uganda and Tanzania, making us a truly Eastern African company," said Ciano.

The chain is optimistic about growth prospects in 2015 and expects customer spending to go up.

Ciano noted that the decline in cost of living expected with the reduction in the price of fuel and electricity was likely to increase consumer spending.

"We should see a growth in the size of the shopping basket as households get more disposable income with the ease in the cost of living," he said. Endi