Kenyan chain supermarket Souk Bazaar, a new entrant to retailing in Kenya, is set to open its second outlet in Kenya. The new outlet will open in the former Nakumatt Lifestyle store in the Hazina Trade Centre on Monrovia Street in Nairobi’s CBD, which closed down in December 2017.

The original Souk Bazaar in Nairobi’s NextGen Mall was set up by the mall owners, who are also directors of Riayn Developers Group, to take over the space left by Nakumatt’s former store and provide a much needed anchor tenancy capable of driving footfall to the mall. In fact, the mall owners enlarged the store: where Nakumatt had taken 5,500m² when NextGen Mall opened in January 2017, the new Souk Bazaar occupies a 5o% larger space, 8,350m².

The first Souk Bazaar opened in October 2017, just one month after Nakumatt closed its doors, and took a 20 year lease. The speed at which the mall owners established a new supermarket suggested planning for Souk Bazaar had begun at least 12 months previously.

Distributors we spoke to in Nairobi were somewhat dismissive of Souk Bazaar, suggesting that its tenure in NextGen Mall was only until the owners got a better offer from an established chain. As such, Souk Bazaar’s move to establish a second store is an interesting one: Hazina Trade Centre is not owned by Riayn Developers Group or an associated company. It is part of Kenyan government pension fund owner NSSF. NSSF evicted Nakumatt in late December 2017 and looks to have struggled to find a suitor in Carrefour, Shoprite, Naivas or Choppies – all of whom have taken up other space vacated by Uchumi or Nakumatt in recent months.

Souk Bazaar is betting on attracting foot traffic from customers in the CBD and away from smaller stores. The site itself sits in a high footfall area on the edge of Nairobi’s CBD, where the majority of the competition is smaller proximity supermarkets (Eastmatt, Choppies and Tuskys) that offer convenience but limited choice. To its north, Souk Bazaar will compete with Shoprite’s upcoming Westgate supermarket. To its south, Souk Bazaar will compete with what looks like being a new Carrefour on the Uhuru Highway, where Nakumatt’s flagship Mega branch was. We suspect the issue that turned off other retailers was high rent, the slightly smaller footprint of the store compared to what Shoprite or Carrefour typically seek, and the availability of other space in more premium malls.