Huge losses force Uchumi to close shop in Uganda,Tanzania

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Kenya-based regional Supermarket chain Uchumi Ltd has announced the closure of its two operations in Uganda and Tanzania, citing financial difficulties that have rocked the company even amidst plans to expand to Rwanda.

In a statement released Thursday, Uchumi said the massive closures were due to losses the company has incurred in both Tanzania and Uganda over the past few years.

The company revealed in the statement, Uchumi Tanzania posted a net loss of TSh 2.212 billion in 2014 and 2.706 billion in 2013. Uchumi Uganda likeswise, incurred a net loss of Ushs10.3billion 2014 and Ush8.9 billion the previous year.

Uchumi said it has tried to support the failing operations with Ksh200millions every year but the continued substantial losses forced the board to ultimately close down the branches.

“The board is pursing various avenues to meet its obligations as well as finance its activities over the coming Christmas and New Year season. We are in process of engaging stakeholders including suppliers, employees, financers and regulators” John K. Wambugu, the company secretary.

Uchumi is a listed company in Rwanda, Uganda, Kenya and Tanzania; and is expected to open another outlet in Kigali soon.

There have been reported protests by employees of the failing company in both Tanzania and Uganda over fears the company was closing without paying their salaries.