Westgate Attack Chops $50M Off Kenyan Retailer Nakumatt’s Sales
From Business Daily
Retail giant Nakumatt Supermarkets lost at least Sh4.3 billion ($50 million) in sales and saw revenue fall by nearly a tenth last year as its branches in Kenya felt the full effect of the Westgate Mall terrorist attack.
The plunge highlights the rough seas retailers are braving in an environment characterised by insecurity concerns and sluggish economic growth amid rising fixed costs such as wages, rent and insurance.
In their latest trading update, the regional chain has reported gross sales of over $600 million (about Sh52 billion) for the fiscal year ended February 2014, compared to $650 million (Sh56.5 billion) a year earlier, a drop of 7.7 per cent.
Nakumatt executives attribute this to a slowdown in Business at other malls where they are anchor tenants following the destruction of their Nairobi outlet at the Westgate Mall in the terrorist attack by Somalia’s Al-Shabaab militia in September last year.
More than Sh1.5 billion worth of stock was lost in a fire started during an assault on the attackers by security forces. Insurance payments for some of the losses were made before the end of the financial year totalling Sh1.41 billion.
Before the attack, the Westgate branch had a turnover of about Sh450 million a month, so its loss six months to the end of the financial year meant that Nakumatt had to forego at least Sh2.7 billion in sales.
Nakumatt attributes the larger drop in sales to a slow economy as well as fears among shoppers of Westgate-style assaults on other malls.
Read more at Business Daily