Suppliers are concerned over the mixed signals being sent by the board of Botswana based Choppies Supermarkets' over their planned Kenya exit and pending payments
Kenya Association of Supplier's chief executive Ishmael Bett, said they are monitoring to advice suppliers on how to deal with the outcome.
This follows reports emerged that the supermarket plans to exit the Kenyan market after years of struggling in an extremely competitive environment.
According to Bett, after a shareholder meeting held on September 4, the new board assured them that operations in Kenya would not be disbanded.
The company in May announced the suspension of its CEO, Ramachandran Ottapathu after an external audit report established a number of irregularities in inventory records and bulk sales.
“Choppies supermarket has assured us that they are not leaving but we are watching closely,” Bett said.
“The information they are giving us is that the decision to exit was first made by the old board. And with the new board, we don't have to be worried,” he said.
Last week, the suppliers lobby group signed a Memorandum of Understanding with the retailer, a move that Bett said indicated their stay.
“What we need to do is fto get to the bottom of it,” he said.
Suppliers are owed Sh600 million and the MoU stipulated that 50 per cent of this be made as initial payment, while the balance be paid into two tranches within three months after every six weeks.
The supermarket has also sacked 200 workers.
In a termination notice signed by the company’s human resource manager Joshua Were, the company cited redundancy as a reason.
The notice dated August 31 indicated that there are ongoing talks with the Kenya Union of Commercial Food and Allied Workers (Kucfaw) for a favourable compensation package for the affected workers.
“This termination is due to the reduced business which has been running for several months which you are aware of, and the company is unable to sustain the current wage bill, noting that the business has gone down and is taking time for full recovery,” read the letter in part.
The affected workers have been advised not to report to work even as they serve a one-month notice ending on September 30.
The shrinking retail business and increased competition has seen Quick Mart and Tumaini supermarkets announce a merger plan.
The combined entity will create a network of 30 retail stores at the end of this year.
