- The impact of Covid-19 on the retailer has seen the situation at the retail Supermarket go from bad to worse.
- In April, Tuskys said it had “temporarily” closed three branches including Digo Road (Mombasa), Kitale Mega (Kitale) and Tom Mboya (Nairobi).
- Tuskys Supermarket became the first major retailer to face the scrutiny of CAK’s Buyer Power Department that was created after former supermarket giant Nakumatt Holdings went down with Sh18.5 billion of supplier debt.
Tuskys Supermarket is reportedly looking for a partner after the heavy burden of debts befell the company. In June, Tuskys paid a total of Sh.2.7 billion to suppliers as it raced to beat a regulatory deadline to settle its debts owed to suppliers.
The Competition Authority of Kenya (CAK) had ordered Tuskys to settle supplier debt of over Sh1.2 billion by Thursday last week after a group of companies complained to the regulator- CAK about the retailer’s default history.
In April, Tuskys said it had “temporarily” closed three branches including Digo Road (Mombasa), Kitale Mega (Kitale) and Tom Mboya (Nairobi).
Tuskys customers have been complaining about stock-outs while suppliers cry of delayed payments. The East African Newspaper reported last months that the government had placed Tuskys Supermarket on its watch list for inability to meet contract obligations with suppliers.
In the recent days, more shelves in major Tuskys supermarkets continue to be empty as woes of the company deepens.
Tuskys had reported that it was reeling from the impact of the Covid-19 pandemic. However retail experts says there’s more than meet the eye with early signs of distress present.
The impact of Covid-19 on the retailer has seen the situation at the retail Supermarket go from bad to worse.
Sagaci Research, a provider of African market data and analysis, revealed that Tuskys appeared to be in the weakest financial position of any supermarket chain in the country.
The firm, in a market report after the closure of the three stores, noted that allegations of internal fraud, sibling rivalry, aggressive debt fueled by expansion and fierce competition from other market players were taking a toll on the business,
“Tuskys appears to be in the weakest financial position of any of the major supermarket chains in Kenya, and if Covid-19 were to claim a victim in chained grocery retail, it would be the most likely candidate,” said the Sagaci Research.
“Having expanded rapidly over the past five years, the suspicion is that, like Nakumatt, debt-fueled growth has left Tuskys vulnerable to external shocks.”
“Moreover, allegations of internal fraud have dogged the retailer for almost a decade, as members of its factious founding family fight for control of the business, while its market share has come under pressure, particularly in Nairobi, as rivals like Carrefour and Naivas have opened new stores. Late last year, we noted media reports that Tuskys was seeking to raise working capital, while just two months ago, Tuskys’ management was downplaying the significance of a round of redundancies at its head office,” said Sagaci.
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Tuskys Supermarket became the first major retailer to face the scrutiny of CAK’s Buyer Power Department that was created after former supermarket giant Nakumatt Holdings went down with Sh18.5 billion of supplier debt.
Milk processing plant New KCC is among the companies that stopped supplying Tuskys owing to the pileup of unpaid debt, as a result, this caused stockouts of essential items on the retailer’s shelves.
Allegations of piling rental fees have further pushed the family owned chain of Supermarkets Company to the knees.
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