Uchumi Supermarkets has closed down two of its non-performing branches in Uganda, following the closure of the Syokimau and Maua branches in Kenya.
The move is part of a shake-up process aimed at reviving the retailer’s regional performance after the entry of CEO Julius Kipngetich.
“We reviewed all branches and decided to invest more in performing ones as we phase out non-performing branches. Kabalagala and Nateete in Kampala, Uganda, together with Syokimau and Maua are affected in the process,” said Mr Kipngetich by phone.
The Kabalagala branch has been struggling financially, and its power was cut last week owing to a Sh70 million electricity bill. The move also saw business interrupted by its closure due to the power cut.
Mr Gichamba Chege, the acting Uchumi country general manager, said 180 workers from the two branches had been sent home on forced leave pending communication from the head office in Nairobi.
As of June this year, Uchumi had 40 branches with 4,500 employees spread across East Africa, with a majority of them in Kenya, Uganda and Tanzania.
Uchumi chairwoman Khadija Mire had in June said that going forward the retail chain’s main focus would be on performance, location and management.
Uchumi’s reorganization began with the sacking of CEO Jonathan Ciano alongside chief finance officer Chadwick Omondi Okumu for what the board called gross misconduct and negligence.
The new restructuring process is expected to turn around the struggling retailer, which owes its suppliers millions of shillings. The poor store performance has been attributed to low staff morale and the absence of basic goods from the shelves.