Kenya’s leading supermarket chain, Naivas Limited, recently reported a robust financial performance, signaling significant growth compared to the previous year. The disclosure came from Mauritian conglomerate IBL Group, which acquired a 26.3 percent stake in Naivas as part of a consortium with a combined 40 percent equity.

According to IBL’s trading update, Naivas generated higher profits in the first quarter, resulting in a share of profits of 184 million Mauritian Rupees (equivalent to approximately Sh553.4 million). This indicates that Naivas’ total earnings reached Sh2.1 billion in the nine-month period ending in March.

Naivas has been a consistently profitable player in the formal retail sector, attracting major investors who have paid a premium to become shareholders. In the previous fiscal year, the supermarket chain reported sales of Sh65.1 billion, with a net profit of Sh2 billion, translating to a net margin of 3.18 percent. This marked an improvement from the previous year when Naivas achieved a net income of Sh1 billion on sales of Sh54 billion, with a net margin of 1.9 percent.

In August of last year, the founders of Naivas, the family of Peter Mukuha Kago, sold an 8.5 percent stake to the IBL consortium for $32.29 million (Sh4.4 billion). This transaction valued the retailer at Sh45.6 billion. The family, along with other stakeholders such as the International Finance Corporation (IFC), DEG, Amethis, MCB Equity Fund, Proparco, and DEG, collectively sold a 40 percent stake in Naivas for a record-setting $151.97 million (Sh20.9 billion).

Since its establishment in 1990, Naivas has expanded to become the largest supermarket chain in Kenya, with over 84 stores and 8,000 employees as of June 2022. Its remarkable growth has taken place amidst the struggles faced by competitors like Nakumatt Holdings, Uchumi Supermarkets, and Tuskys, which succumbed to bankruptcy due to substantial debt or mismanagement.

While the financial performance of other significant retailers such as Carrefour and Quickmart remains undisclosed, Naivas has continued its expansion efforts. In 2022 alone, the supermarket chain opened seven new stores, increasing its branch count to 91 by December. These newly opened branches include Elgon View Mall in Eldoret, Naivas Nairobi West, Naivas Express Uthiru, and Greenwood Mall in Meru. Naivas strategically positions its supermarkets in busy locations, including middle-class residential neighborhoods, to cater to a diverse customer base.