Tuskys Supermarket Debts: A few years ago, the largest supermarket in Kenya was known as Nakumatt. Today, this once trumpeting elephant has gone mute. When it collapsed, Nakumatt fell with thousands of suppliers whom it owed billions of money. The retailer’s fall from grace to grass was traced to an ambitious expansion that was carried out without any sustainable strategy. In addition to debts, Nakumatt was also claimed to have been a hub of money laundering.
While most Kenyans remember Nakumatt in passing, its suppliers continue to bear the hurt of losing money they had broken sweat for. Worse, with the possibility of recovery next to impossible. It is such bitter supplier experiences that have aroused fears among the suppliers of Tuskys Supermarket, which is the latest retailer in Kenya to fall into troubled waters.
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A few weeks ago, the supermarket announced that it is facing difficulties in paying suppliers, banks and landlords. The retailer wrote to its suppliers informing them that even recently renegotiated payment terms may not be honoured on the agreed timelines. “Supplier obligations may be deferred and therefore some of your members have been impacted. We have communicated individually to these suppliers that their payments will be delayed,” the letter by Tuskys chief executive officer Dan Githua said.
Now, manufacturers have rung the alarm bells urging the government to intervene and oversee the payment of money owed to suppliers in order to avoid a full-blown debt crisis.
“The suppliers are jittery over the debt impasse, especially following the collapse of Nakumatt and Uchumi supermarkets, which sank with Sh. 18 billion owed to them,” a report that appeared in a local daily recently said.
The manufacturers have gone a step further and written to the Ministry of Industrialization and Trade and the Competition Authority of Kenya (CAK) over the pending bills. “Manufacturers have informed us that their payments remain outstanding to date for goods supplied as early as this year and there has been low communication from yourselves on the measures indicated in your letter,” Ms Phylis Wakiaga, the chief executive officer of the Kenya Association of Manufacturers said in a letter dated May 22 and addressed to Tuskys Supermarket. “This situation is now causing apprehension within the manufacturing sector and which may lead to low supply of goods in the market in order to manage their risks.”
This letter was copied to Industrialization and Trade Cabinet Secretary Betty Maina and the Competition Authority of Kenya Director-General Wang’ombe Kariuki.
Away from the piling supplier debts, reports say that sections of the Tuskys branches have been reporting stock-outs in the same fashion that befell Nakumatt Supermarket.
“Is it just me or is Tuskys showing signs of trouble? Empty shelves, unavailability of many common brands and general feel of resignation. Reminds me of the twilight days of Nakumatt and Uchumi,” Kaka Karim reported on Facebook.
“Tuskys has been having empty shelves for a while now. Tuskys Buruburu,” said Jules Gathiru.
“In Kitale they recently closed a branch which they took from Nakumatt(had ample parking) and used corona as an excuse. But I noted that they didn’t transfer some of the goods to the CBD branch, which had more than enough space to swallow all merchandise from the closed branch. When asked why, they say all goods were transferred to Nairobi. But it’s curious that a supermarket doesn’t have pillows, mattresses, clothing etc and still calls itself a supermarket,” Stephen Arap Chumo commented.