So Nakumatt is closing shop

Nakumatt finally closes shop

Apart from some company-specific issues that they’ve had for some time, I think their (and others like Uchumi) demise has a lot to do with the bad (global, regional, and national) economy.

Weak economy > low demand > supply/demand imbalance > poor business > closure.

However, for Uganda’s case, whoever is doing business should notice the structure of consumer demand. Latest data from UBOS’s Statistical Abstract shows over 83% of household expenditure cannot be retailed.

See the chart below. Ugandans are spending on food (and you know most of our staples are traded in bargain markets not stores), housing & utilities, transport & communication, education & health, things Nakumatt or other supermarkets can’t retail.

So how can they survive? Retail trade in UG depends on windfalls. So dear friend, if you want to survive in business, factor the stats in your business planning. Don’t do business simply Bse it’s in vogue or your grandparents did the same. I’ll pen a detailed article on this next week, Inshallah. Enjoy your Sunday.

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