Tony254
JF-Expert Member
- May 11, 2017
- 16,016
- 16,435
I think there is a problem with the airline business worldwide but for supermarkets I don't think there is any problem with that industry, I will tell you my theory about it.
For supermarkets I think it is a perfect business, and the only reason why Kenyan supermarkets fail is because of mismanagement. Notice how all local supermarkets are family owned businesses? Now look at Tuskys and all the family drama of brothers accusing each other of stealing money from the supermarket. Look at Nakumatt, a big giant that failed because that muhindi owner mismanaged it completely. Couldn't even pay debt that ran into billions. Look at Uchumi, they had so much debt that they went into receivership. Carrefour which is an international supermarket is well run.
My advise to local chains is to remove family members in the day to day running of the chains. Family members should be shareholders only but they should employ finance experts to run the companies for them. Also, they should list their companies on the Nairobi securities exchange. That will inject professionalism into the companies. I work for a listed company and the standards that they have to meet are very high. Listed companies have to audit their books every year, and they have to publish their audited accounts in a newspaper. Those companies you see on NSE are run professionally, there are no jokers there. No stealing of money. Supermarkets should not make losses because they have a 3 month credit policy where they do not pay suppliers immediately and so have no reason to make losses. They also mark-up their goods before selling them at a profit.