NAIROBI, July 16 (Xinhua) -- Kenya's improving macro-economic environment is boosting the retail sector, with supermarkets leading businesses that have recorded expansion since the year started.
Analysts have noted that the 6.3 percent growth rate of the country's economy in 2018, which is 1.4 percentage points higher than that in 2017, has ensured that citizens have more disposable income, giving a boost to the retail sector.
Most of the international and local retailers in the east African nation are recording a boom, with the businesses opening new branches in the country and stiffening competition.
Naivas is the latest retail chain to open a new branch on the outskirts of Nairobi as it fights for the fast-growing middle-income market.
The local retailer opened its 53rd outlet in Ongata Rongai, a growing middle-income town in Kajiado County on the outskirts of the capital Nairobi.
"The continued expansion of local retailers is supported by the improving macroeconomic environment, increased disposable income as a result of an expanding middle class thus creating demand for goods and services," according to Cytonn, a Nairobi-based investment firm.
The firm noted that with gross domestic product per capita growing at 10.3 percent per annum over the last four years, from 125,756 Kenyan shillings (1,250 U.S. dollars) in 2014 to1,860 dollars in 2018, the retail sector is expanding.
According to Cytonn, the capital Nairobi's satellite towns hold the future of the expanding retail sector.
"These towns are increasingly presenting a viable opportunity to retailers due to low rental charges of 1.2 dollars per square feet as compared to the city centre average of 1.7 dollars," said Cytonn.
"Kenya's retail sector has been vibrant over the past few years, and would continue to attract interest from renowned international retailers as well as the robust expansion of local retailers," said Cytonn.
But even as the retail chains expand, they face competition from informal retail stalls and kiosks, which have over the years dominated the market and still do, according to Ernest Manuyo, a business lecturer at Pioneer Institute in Nairobi.
"Only 30 percent of Kenya's retail market is formal. Which means the kiosks still hold a huge market and the fact that they are readily accessible and some offer credit makes them appealing to consumers," he said.
