Headline, March 19 2024/ ''' AFRICA'S ECONOMICS AFFAIRS '''



RUAKA : '' AFRICA'S SUPERMARKET REVOLUTION.'' The rise of local chains reflects deeper trends in the continent. To walk along the main road Ruaka, Nairobi, is to glimpse the extremes of African shopping.

Market stalls selling vegetables and charcoal spill onto the street. In the distance is a plush mall with a Carrefour, one of 20 franchises of the French supermarket in Kenya's capital.

Further up, though, is a Quickmart. The Kenyan supermarket chain has 59 branches, an increase from 25 in 2020. It is not as fancy as the Carrefour, but nor is it as chaotic as the roadside kiosks. '' We're a shop that is among the people,'' says Peter Kan g'iri, the CEO. '' That's the difference.''

' Lost in the supermarket ' : On average Africans buy more than 70% of their food, drinks and cosmetics from informal vendors. Supermarkets have historically served an affluent elite, opting not to compete for poorer customers.

But local chains such as Quickmart suggest that it is possible to fill the middle in African retail. Their success reflects deeper change in African economies and demography.

ANALYSTS HAVE LONG TRIED TO MEASURE AFRICA'S ''middle class'' by counting people within somewhat arbitrary income ranges. Newer analysis has incorporated data on ownership of bourgeois assets, such as fridges.

Last year Frayam, an analytic firm, estimated that there were 330 million people in what it called Africa's ''consumer class'', roughly a quarter of the continent's population of 1.3 billion.

Two-thirds were in just five countries : Egypt, Nigeria, South Africa, Morocco and Algeria; most of the other third were spread across a further 15 states, including Kenya.

Yet any analysis, however sophisticated, risks implying there are tens of millions of Africans able to pile their trolleys high.

Even when adjusted for different prices of goods in different places [ so called ''purchasing-power parity''] average GDP per person in sub Saharan Africa in 2022 was $4,400, according to the World Bank, almost half of India's and about one-twelfth of Britain's.

Annulised food-price inflation in the region has been at least 10% since Russia's invasion of Ukraine, squeezing household budgets. The average basket of goods at Quckmart is worth $6.

Twenty-four of Quickmart's branches are open 24 hours a day, serving the Kenyans who work in informal trades with no fixed hours. It often locates branches on the left-hand side of the road leading out of the city, so that punters returning to swelling satellite towns can pop in on their way home.

Shelves in downtown stores are replete with takeaways for Nairobi's yuppies, who are marrying later, and living without kids in the newly built flats.

Kazyon capitalizes on similar trends in Egypt. The discount retailer, founded in 2014, has about 1,000 shops. It competes with traditional markets for customers, targeting unfashionable parts of cities. Its loyalty scheme is the largest in any country in Africa, says Hassan Heikal, its founder.

Since it opened in 2015 in Nigeria, Africa's most populous country, Marketsquare has expanded to nearly 30 stores. Ebele Enunwa, the CEO, saw a huge potential customer base among the 97% of Nigerians who shop at open-air markets.

'' These are not the nicest places to shop : dirty, untidy, disorganised, unsafe,'' he argues. '' People are screaming at you. It can literally give you a headache.''

'' I had a bit of nationalist streak as well,'' says Enunwa. In 2021 Shoprite, a South African retailer, sold its outlets in Nigeria, a tacit admission that it had failed to crack the market.

Its struggles had several causes, including a decision to sign leases priced in dollars, so the chain was stung, when the naira depreciated. It also found it tricky to repatriate funds.

Yet at root, argues Mr. Enunwa, was a belief that what worked in South Africa would work in Nigeria. Its shops imported many South African items. '' These were products that Nigerian did not know or care about.''

The Honour and Serving of the Latest Global Operational Research on Economics, Modern Retail and the Consumers continues. The World Students Society thanks The Economist.

With most respectful dedication the great people of Africa, the Science of Economics, and then Students, Professors and Teachers of the world.

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