This archive report was first published on 6 July 2021.
Published on July 6, 2021, the collapse of Tuskys Supermarket serves as a stark reminder of the perils of the asset-light model in Kenya's retail sector.
When I first arrived in Nairobi in 1995, the Tuskys brand was not yet established, but its predecessor had a presence. Over the years, the supermarket grew rapidly, expanding both locally and internationally.
As I witnessed a Tuskys branch in Uganda in 2018, I thought it was poised to become the next Kenyan multinational. However, just two years later, the company's fortunes had dramatically changed, leaving it an unrecognizable shell.
The recent failures of retailers in Kenya underscore the need for tighter regulations in this sector. The asset-light model, pioneered by Nakumatt, has come under scrutiny, with many questioning its long-term viability.
Naivas and Quickmart's rapid expansion is a concerning trend, reminiscent of the growth experienced by Tuskys in its heyday. If this model is to continue, supermarkets should be regulated in a similar manner to banks, with measures in place to protect suppliers and creditors.
It is imperative that we learn from the mistakes of the past and implement reforms to prevent a repeat of the Tuskys debacle. By doing so, we can ensure the long-term sustainability of Kenya's retail sector.
