![[Kenya] Choppies Supermarkets to take over Ukwala chain stores](Choppies.jpg)
[Kenya] Choppies Supermarkets to take over Ukwala chain stores
Choppies Supermarkets from Botswana is set to acquire Nairobi based Ukwala Supermarkets store in December as it seeks to solidify its foothold in the country.
According to Choppies Group CEO Ramachandran Ottapathu the move is part of the retailer's plan to have at least 30 stores countrywide in the next two years, mainly in large populous cities of Nairobi and Mombasa. “We will take over Nairobi shops and reinvest them. We are also looking for space in Mombasa,” he said.
He added that the retailer will also start operating in Eldoret next year after successfully taking over nine Ukwala stores in the towns of Kisumu, Bungoma, Nakuru and Kisii.
Choppies announced its takeover of eight Ukwala outlets on May 30, after a year-long quest. Its first announcement to enter Kenya in May last year was delayed by a Kenya Revenue Authority claim, which was demanding Sh946 million in taxes and interest from Ukwala.
The taxman went to court to seek an injunction on the acquisition, delaying the deal.
KRA and Ukwala however agreed to settle the dispute out of court. In a Gazette notice dated October 30, 2015, the two stores said they had struck a deal to fully transfer operations at outlets in Nairobi, Kisumu and Bungoma subject to “certain conditions precedent”.
They also agreed that Choppies would not be responsible for debts and other liabilities incurred by Ukwala at the seven branches it had bought, including three in Nairobi.
The Nairobi branches Choppies is expected to take over next month include Tom Mboya Street, Mfangano and Haile Selassie. Among branches it has already acquired are Kenshop, Foamat, Swan and Dubai in Kisumu, and the Bungoma branch.
“We are keen to have outlets across the country. This includes coming up with new stores,” Ottapathu said. Choppies enterprises Kenya, the Botswana retailer's subsidiary continues trading as Ukwala.
Choppies also operates in South Africa with 20 stores. It has expanded into Zimbabwe, Zambia and Namibia. The two retailers agreed to acquire Ukwala's business for $10 million (Sh1.02 billion), a deal announced on May 29, 2015.
Ukwala had initially reached a deal with Tuskys, Kenya's second largest retailer by market share, to sell its six outlets in Nairobi, in October, 2013.
The Competition Authority of Kenya however declined to approve the deal for fair competition reasons, only sanctioning the acquisition of the Jogoo Road branch on September 19, 2014. The entry of Choppies into the capital comes amid increased competition from multi-nationals and locally owned retail stores which are setting up shop in Nairobi.
