Majid Al Futtaim has finally opened its first Carrefour store in Uganda after months of delays. The first store, in Kampala’s Oasis Mall, will be joined in 2020 with a 3,400m² outlet at Kampala’s Metroplex Mall. Now the company has revealed three more stores are planned to open within the next three years.
The new store openings would bring Carrefour and Shoprite into head to head competition and likely see the two chains lead the Ugandan market. Nakumatt and Uchumi formerly had store networks in Uganda while Tuskys has cut its store numbers in the country. Carrefour’s first store in Oasis Mall, with 2,800m² of retail space, was previously occupied by Nakumatt until 2017 and first announced in September 2018.
So far, Majid Al Futtaim has spent $4m acquiring its first two Carrefour sites and intends to spend another $7.5m on its next three sites.
The kind of impact another mature, multinational supermarket chain can have in Uganda was underscored this week when the Uganda National Bureau of Standards (UNBS) closed the bakery sections of several supermarkets, including those in stores belong to local chains Capital Shoppers and Mega Standard, as well as Tuskys.
Majid Al Futtaim, like Shoprite, will seek to use its scale and expertise to improve the service offer – sometimes woeful in Ugandan supermarkets – and deliver price leadership in core categories such as flour, rice, sugar, oil. Without question, incumbent chains like Capital Shoppers and Kenjoy will find themselves under far greater pressure and may well start to sound the alarm bells about the merits of foreign-owned supermarkets in Uganda. We have also seen more Chinese interest in Uganda too, with a flagship store opening in late 2019.
Perhaps the more interesting impact will be the extent to which Majid Al Futtaim and Shoprite foster deeper relationships with local suppliers. Ugandan food processors and manufacturers have long been second best to their counterparts in Kenya – where there are currently seven Carrefour stores and three Shoprites – but trade relations between Kenya and Uganda can be frictional at times, with unnecessary delays at borders, seizures of products and other barriers.
