Early this year and much of 2016, Nakumatt has steadily and effectively closed down most of its branches within Uganda to remain with less than two. The once booming franchise is in its last days of survival with the few remaining branches no longer replenishing stock which is a clear sign it might soon sign out of this rather difficult and painful economy.
Its strange how a once prestigious large shopping outlet suddenly loses track and ends up closing shop within a few months while other competitors like Capital shoppers, Mega Standard and the likes keep expanding year after year.
Take a look at Mega Standard supermarket which has not only employed lower pricing tactics but also around November, 2016 opened up another branch at Garden City conveniently where Uchumi supermarket was located putting it in direct competition with –market leaders. Such tactics have forcefully driven out the other competition.
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Locally owned supermarkets are beating franchises like Nakumatt which was the biggest shopping outlet in Uganda which is contrary to the belief that the economy is in a bad shape.
Mega Standard is legally believed to be under the ownership of Aponye who owns the old Mega Standard supermarket in the Old Taxi park and Aponye Hotel on William Street.
Skeptics argue though that he is just a proxy and that the big Mega Standard is actually owned by Janet Museveni. Reports assert that the first family is directly involved and Mega is definitely under the control of their control.
Nakumatt has been under attack for a quite a while and we think Mega Standard is one of the under laying factors behind its collapse.
Based on a statement made by Nakumatt Holdings around October 2016, it admitted that it was in the red and was seeking a rescue.
“Like any other business operating in this market, Nakumatt Holdings has faced a number of unforeseen business challenges. These challenges range from a depressed economy, higher operating costs and extraneous factors including risk management due to prevailing security threats, among others,” the statement signed by Managing Director Atul Shah reads in part.
When the managing director hinted on, “prevailing security threats, among others” in his statement a lot may have been left out to hide the truth about whats really going in Uganda’s economy that’s under the wraps of the powerful family.
As other locally owned supermarkets like Capital shoppers and Quality supermarket continue to grow, bigger players like Nakumatt might close down which is too convenient if you look at the timing of their exit from the Ugandan market.
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