The top Uganda leading retailer, Nakumatt has admitted that the current slowdown in the economy has frustrated cash flow in its operations.
This follows growing concern from customers through various social media platforms many of who were sceptical about the supermarket’s operations. Numerous posts by shoppers displayed empty.
A statement released Thursday by Atul Shah, the Managing Director of Nakumatt Holdings also revealed that the business has not been able to meet its financial obligations to its suppliers resulting into a high debt.
“Like any other business operating in this market, Nakumatt Holdings has faced a number of unforeseen business challenges. These challenges range from a depressed economy, higher operating costs and extraneous factors including enhanced risk management due to prevailing security threats,” the statement read.
Nakumatt supermarket cutting logistics
The management however says it is undertaking major restructuring in its processes including reviewing terms with its suppliers, recruiting qualified personnel to handle specialized units and integrating the supermarket’s warehouse management system.
“This will allow us to hold optimum stocks based on daily shop floor off take to streamline supplier payment systems by ordering stocks based on actual consumption trends while reducing on shrinkage.”
According to the statement, Nakumatt is engaging local and international investors to help the business resume normal operations with significant capitalization.
“We are conscious that such financial restructuring remains a key imperative thus our focus on cheaper, long term solutions which are aligned to the overall business strategy. The facility will help retire existing funding tools including bank loans and related debts.”
It also says; “We are confident that the process will allow us to regain our footing with full supplier settlements and sustainably continue the aggressive expansion plan we have set in our 5 year business plan.”
Nakumatt supermarket entered the Ugandan market in 2011 and currently has 10 stores in the country and over 60 subsidiaries across East Africa (Kenya, Uganda, Rwanda and Tanzania).
Its Uganda stores include Nakumatt Kisementi, Entebbe, Mbarara, Bugolobi Village, Bugolobi Express, Katwe, Bukoto, Naalya and Nakumatt Oasis which employ hundreds of Ugandans.