“The ministry has received the report and has been engaging with both the retailer and the suppliers and monitoring the situation closely,” said Ms Maina.
The government said early intervention in the retailer’s precarious situation will avert the collapse of the supermarket, which employs almost 6,000 workers and operates over 63 branches in Kenya and Uganda.
The Kenya Association of Manufacturers (KAM) whose members form the bulk of Tuskys’ suppliers said the retailer is facing debt payment challenges and is flouting the joint Prompt Payment Code of Practice that provides for payment of Fast Moving Consumer Goods (FMCG) within 30 days from the date of the invoice while other goods should be 45 days.
Although the agreement was signed by the Association of Kenya Suppliers, Retail Traders Association of Kenya and KAM, Tuskys wants to pay suppliers after five months, but manufactures claim this will erode their cash flow positions and destabilise their businesses.
RETAIL SECTOR
In April this year, Shoprite Holdings Ltd, Africa’s largest fast-moving consumer goods retailer took its aggressive expansion to Kenya but came to a sudden halt after the firm announced the closure of its Waterfront branch in Nairobi’s Karen suburb rendering more than 100 workers redundant.
