Uchumi Supermarkets could shut down some of its under performing branches resulting in job losses as it restructures its business.
Board chairman Khadija Mire said an audit to assess performance of all branches was already underway and would be complete in two weeks. Uchumi currently has 40 branches and 4,500 employees spread across the region.
"Our reporter has learned that Uchumi owes The Quality Group in excess of USD 700, 000/- as they are the tenants of Quality Center Mall and seems to have defaulted in rent and utility services.
Quality Group that at a stage was to become the rescuer of Uchumi, its brand and thousands of its employees may be left with no alternative but to take the legal route to recover its dues."
"Is there a deliberate strategy from Uchumi management to crash its own share price and then introduce the HAND OF GOD which will come to their rescue or is it poor management? Whatever be the reason, there seems to be more than what meets the eye, and it is evident that Uchumi is in for far more troubled times ahead."
The reorganisation is expected to turn around the struggling retailer that has fallen behind on its payments to suppliers. Its stores are said to be performing poorly due to low staff morale and absence of basic goods from its shelves.
“We have not yet identified the outlets that will be affected in our new market strategy but the recommendation from the audit will be out in the next three weeks,” said Ms Mire.
The retailer last year closed one of its outlets in Uganda citing poor location that was negatively affecting its sales volumes.
Most Uchumi outlets have not been renovated for many years giving rival retailers an upper hand in attracting customers. These competitors are located in new malls and have spent heavily on branding and acquisitions.
“We are aware that Uchumi is more disadvantaged compared to other supermarkets given that most of our outlets have not being renovated in a long time. That is one of the areas we are concerned about because appearance is one of the preferences that most shoppers are keen on,” said Ms Mire.
On Friday the board appointed financial consultancy Deloitte to headhunt a new CEO.
“The chief executive officer will have overall strategic responsibility for Uchumi Supermarkets staff, programmes, expansion and execution of its mission,” said Uchumi in the Friday notice.
“The new CEO will be required to have a Masters degree in business or an operations related field with at least 10 years experience at an executive management level within the retail supermarket industry or fast moving consumer goods sector,” added the statement.
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