Builders, a subsidiary of South Africa’s retail giant Massmart, is closing down its business at the Waterfront Karen Nairobi in less than three years of operation after finding the going very difficult in East Africa’s largest economy.
The announcement of the closure, which was made two weeks ago, did not come as a surprise, going by the trend of recent exits by South African retail brands such as Shoprite, Massmart and their Botswana-based counterpart Choppies.
The latest exit by Builders Warehouse, however, has left policy makers, investment analysts and the investing fraternity pondering the future of investments by South African firms in Kenya and the entire East African region.
The Kenya Private Sector Alliance (Kepsa), an umbrella body for private businesses in the country acknowledges that the exit of South African firms from the country is an issue of concern and efforts are being put together to establish the specific issues impacting South African firms in the country.
Consumer behaviour
“Not sure why South African investments have found it hard to invest in Kenya unlike others. We are trying to find out their unique issues as we deal with other business environment issues affecting business as we always do,” says Carol Kariuki, the Kepsa chief executive.
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