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Inside Carrefour’s Game Plan To Outcompete Uganda’s ‘Mushrooming’ Supermarkets

Majid Al Futtaim, one of the leading shopping malls, communities, retail and leisure pioneer across Middle East, Africa and Asia, has confirmed that it will open its first Carrefour stores in Uganda before end of this year.

Carrefour’s first store will be located at Oasis Mall and is expected to recruit over150 employees.

Carrefour’s entry into the Ugandan market comes at a time when the supermarket business in the country is on the down turn due to numerous factors. 

In 2017, respected regional retailer, Nakumatt supermarket closed shop in Uganda due to unprecedented debts owed to landlords and suppliers.

The collapse of Nakumatt followed the exit of another Kenyan based Supermarket- Uchumi that closed shop in 2015 after failing to become economically viable in Uganda.

The supermarket chain that was cross-listed on the Uganda Securities Exchange still owes debts to people who had supplied it with various items. However, Nakumatt and Uchumi aren’t the first to collapse.

 A number of supermarkets especially the pioneers in this business in Uganda are no longer in existence-possibly pointing to how unprofitable the business has become.

So what has Carrefour got to offer in order to beat off competition from the existing players like Capital Shoppers, Game, Standard Supermarket, Shoprite and a host of other small and medium shops?

This is because the new entrant will be competing for almost the same existing customers who are few in number considering the size of Uganda’s economy; it is estimated that Ugandans in middle income class are just over three (3) million out of a population of over 40 million people. Generally, supermarkets are expected to attract high class customers. Uganda’s per capita income stands at less than US$ 700 going by the World Bank recent statistics.

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THE UNTOLD STORY: Why Uganda’s Supermarket Business Is Collapsing

In a media statement, Majid Al Futtaim says Carrefour seeks to cater for evolving customer needs and respond to the growing demand for modern retail in Kampala and its surroundings.

Hani Weiss, CEO of Majid Al Futtaim – Retail says: “Uganda is considered one of the fastest growing economies in Africa, and we are delighted to partner with local stakeholders to offer a world-class retail experience to the Ugandan community, specifically tailored to their needs.”

As part of its expansion strategy, Majid Al Futtaim is planning to open its second Carrefour store in the country in early 2020 at Metroplex Kampala, creating up to150 additional direct and indirect employment opportunities for local talents.

The company says the entry of Carrefour into the market will boost the country’s economy as it will work with local suppliers, manufacturers, producers and farmers across Uganda and contribute to local direct and indirect employment.

It says its stores will stock a mix of international and local brands all certified by relevant government agencies, applying international hygiene standards in order to guarantee food safety to customers.

“Carrefour will also introduce customer service standards, a more sophisticated shopping experience, and best practice for in-store hygiene processes,” it adds.

‘Offering a different shopping experience’

When reminded that other foreign retailers like Nakumatt opened and closed in Uganda, Majid Al Futtaim Carrefour will be successful because they are offering a different shopping experience.

“Carrefour is offering a different shopping experience to its customers and proposes different services to ensure their satisfaction.  At the same time, our expansion plan and entry into new markets is approached and informed by our investment decisions in our business model to ensure business sustainability,” Majid Al Futtaim says in a statement.

It adds: “This has helped us to remain successful in all the markets that we operate in and we are confident that we will be equally successful in Uganda.” 

Just like new companies promise heaven on earth, when asked the difference between Carrefour and other retailers, the new player wasn’t any different.

“At Carrefour, we always strive to provide the best quality and widest selection of consumer goods available in Uganda. We understand our customers’ needs before they do, which means we can create effortless experience that bring senses to live and create unforgettable moments.”

It adds: “May be we can add more about shopping experience: width of the aisles and store layout ease the navigation of the customers, services such as price checker, less than 10 items counter, dedicated counter for disabled people & pregnant women, baby seat included inside shopping trolleys and many more experiences that Makes Carrefour your hypermarket of choice in Kampala.”

Majid Al Futtaim adds that it prides itself in upholding the highest international standards and best practices. This includes ensuring positive supplier relations through prioritising local partners, enhancing supplier efficiency and engaging them with continuous training and support.

Majid Al Futtaim holds the exclusive franchise rights to operate Carrefour in 37 countries and currently operates over 270 Carrefour stores in 15 countries.  Uganda will be its 16th market.

Carrefour started operations in East Africa with its entry into the Kenyan market in 2016 and operates seven stores to date, employing more than 1,400 staff members.

With many supermarkets struggling and others closing shop, it remains to be seen whether Carrefour will succeed in Uganda.

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