Tuskys Supermarket has announced that the coronavirus pandemic has impacted negatively on its business and affected finances. As a result, the supermarket is facing difficulties in paying suppliers, banks and landlords.
According to a report that appeared in a local daily on Wednesday, Tuskys has written to its suppliers informing them that “even recently renegotiated payment terms may not be honoured on the agreed timelines.” It quotes a letter sent to Kimani Rugendo, the chairman of Association of Kenya Suppliers, on April 30, 2020: “Despite these efforts, some 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 was written by Tuskys chief executive officer Dan Githua.
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Already, the supermarket has shut down some of its branches and merged others in a bid to stem losses. It also pushed for reduced rent and asked landlords for deferred rental payments. In April this year, the supermarket shut down three of its branches in the country. The three branches that were closed were Tom Mboya (Nairobi), Kitale Mega and Digo Road (Mombasa).
According to a statement that came from Benard Kahianyu, the retailer’s chairman, the move to close the branches was only temporary.
This, he said, was a move that will ensure the retailer continues serving customers, and as well protect them. In the wake of the coronavirus outbreak. “We have noted that in some areas where we have multiple locations close to each other, we can adequately serve customers better and more efficiently by consolidating our businesses in spacious branches which allow us to implement social distancing and personal hygiene measures better,” said Kahianyu.
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The failure Tuskys Supermarket suppliers to get their pay in good time is bound to elicit fears on the financial stability of the firm. This follows the route that was taken by fallen retailer Nakumatt whose collapse started with supplier payment defaults.