This archive report was first published on 17 June 2020.
As Kenya's retail landscape continues to evolve, Tuskys, one of the country's oldest and largest retail chains, is facing a major crisis. The Competition Authority of Kenya (CAK) has launched an investigation into the supermarket chain's bank accounts over a Sh1.2 billion debt owed to suppliers.
According to Business Daily, on June 17, 2020, the regulator started looking into Tuskys' operations after reports emerged that the retailer was not paying suppliers on time as stipulated in their contracts.
CAK's investigation follows a warning to Tuskys' directors that they risked jail terms for defaulting on suppliers' payments. The regulator has ordered the retailer to settle its outstanding debt in a specified schedule, failure to which the penalties will be imposed.
As of June 16, 2020, Tuskys was ordered to settle the following amounts:
- Sh396.2 million owed to suppliers of fast-moving consumer goods (FMCG) within 14 days.
- Sh499.1 million owed to non-FMCG suppliers within 30 days.
- Sh400.9 million owed to suppliers, which the regulator uncovered in its investigations, to be settled in full within 14 days.
Tuskys has blamed its woes on the COVID-19 pandemic, but a huge chunk of the debt had already accrued before the country reported its first Coronavirus case.
The retailer's troubles have led to the emergence of new players in the ultra-competitive retail market, some of whom are backed by private equity funds to the tune of billions.
Carrefour, a franchise owned by Dubai-based conglomerate Majid Al Futtaim, has access to funding to the tune of $3.4 billion (Ksh362 billion), while Naivas recently raised more than Ksh1.5 billion from the International Finance Corporation (IFC) and other investors.
