Edition 10 Insight Retail Magazine by INSIGHT PUBLICATIONS

ISSUE 08 / OCTOBER - DECEMBER 2014

EDITION 010 | MAY 15TH - AUG 15TH, 2015

UPCOMING EVENTS: CONFERENCES

CENTRAL REGION EASTERN REGION NYERI - 9TH JUL‘15 MERU - 23RD JUL ‘15

CONVENTION 11 - 12 JUNE ‘15

Unlocking Africa’s retail opportunities BE PART OF THE DISCUSSION BOOK TODAY TO RECEIVE 15% DISCOUNT | QUOTE: AFRA15

UGANDAT: +44(0)203KENYA 033 2020

Bakery innovation & Retail Landscape evolution in retail W: www.retailcongressafrica.com E: info@retailcongressafrica.com

in East Africa

Leasing transforms retail sector TANZANIA - Case study outlook TECHNOLOGY TRENDS IN Dispensing trends in Retail & AUTOMATION DISPENSING

RATEGY DIRECTOR | PICK N PAY Jeremy Hodara CO-CEO | AFRICA INTERNET HOLDING

ANAGING DIRECTOR RETAIL ESTATE | MR PRICE Ramanathan Hariharan CEO | MAX, LANDMARK GROUP

S SOUTH AFRICA Christine Service COUNTRY MANAGER | DISNEY

PART OF THE

BROUGHT TO YOU BY:

- Milk , Water & Cooking oil

Retail TechnologySECURITY trends IN RETAIL - Omni-Channel retailing

9 772305

556001 9

RETAIL BUSINESS INTELLIGENCE

772305

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556001

08 10

ISSN 2305-5561

IES

Now available in...

+ RETAIL EVENT UPDATES BAKERY INNOVATIONS

2nd

4th December

2014

Thiagarajan Ramamurthy

INSIGHT RETAIL #10 | MAY 15TH – AUG 15TH, 2015

CONTENTS ISSUE 08 OCTOBER - DECEMBER 2014

PG 10 07 / NAKU SACCO

CONTENTS 08 / LEASING CASE STUDY - TUMAINI 10 / TOMBAKE ENTRY TO KENYA

EDITION 010– BAKE CONSULT 12 / BAKE CONSULTANCY TH TH MAY15

- AUG 15 , 2015

14 / ONE STOP BAKERY SOLUTIONS SHOP 15 / BAKERY ACCESSORIES

PG 16

10.16 / SOMNI hould your business lease or buy CHANNEL RETAILING equipment?

OIL DISPENSING CONCEPT 12.19 /What’s all the fuss about a

trolley? 20 /shopping WORLD CLASS SERVICE - WELLS FARGO

WATERSolutions DISPENSING 14.21 /Vortex inCONCEPT Retail Industry GETTING BAKERY RIGHT RETAILERS 15.26 /Technological trends inFOR dispensing RETAIL LEADERSHIP 16. 28 / Shrink management in retail RETAIL FORUM 2015 CALENDAR 18.29 /Retail Trends to watch 30 / RETAIL IN UGANDA 20. The Advent of Retail Industry in 31 /Uganda RETAIL STATISTICS

RETAIL CONGRESS 21.34 /Antonio food innovations 23.. Insight Consumer Magazine

PG 18

Launch

Subscribe for your next Issue: details on Pg. 33 See See details on Pg. 28

+254.735.350.690 +254.725.350.690 4

INSIGHT RETAIL #10 | MAY 15TH – AUG 15TH, 2015

PG 23

EDITOR’S NOTE Dear Reader, 556001 9 772305

ISSUE 08 / OCTOBER - DECEMBER 2014

RETAIL BUSINESS INTELLIGENCE

556001

ISSN 2305-5561

RETAIL BUSINESS INTELLIGENCE DEFINING REGIONAL STRATEGIES

772305

ISSN 2305-5561

Now available in...

EDITION 010 | MAY 15TH - AUG 15TH, 2015

UPCOMING EVENTS: CONFERENCES

CENTRAL REGION EASTERN REGION NYERI - 9TH JUL‘15 MERU - 23RD JUL ‘15

CONVENTION 11 - 12 JUNE ‘15

Unlocking Africa’s retail opportunities BE PART OF THE DISCUSSION BOOK TODAY TO RECEIVE 15% DISCOUNT | QUOTE: AFRA15

UGANDAT: +44(0)203KENYA 033 2020

Bakery innovation & Retail Landscape evolution in retail W: www.retailcongressafrica.com E: info@retailcongressafrica.com

INSPIRATIONAL SPEAKERS INCLUDE:

in East Africa

Leasing transforms retail sector TANZANIA - Case study outlook TECHNOLOGY TRENDS IN Dispensing trends in Retail & AUTOMATION DISPENSING

CO-SPONSOR:

MEDIA PARTNER:

PART OF THE

BROUGHT TO YOU BY:

- Milk , Water & Cooking oil

Retail TechnologySECURITY trends IN RETAIL - Omni-Channel retailing

2nd

+ RETAIL EVENT UPDATES BAKERY INNOVATIONS

4th December

2014

INSIGHT RETAIL | MAY - JULY, 2015

EDITORIAL & ADVERTISING

Insight Retail East Africa

CONTRIBUTORS Antonio Magnaghi Sameer Shah Martin Okumu Thiagarajan Ramamurthy EDITOR Maureen Musili DESIGN/LAYOUT Judith Okong’o PUBLISHER Insight Retail East Africa © 2015 Insight Retail All material is strictly copyright and all rights were reserved.

Welcome to the 10th Edition of Insight Retail magazine, a quarterly publication for the retail industry in East Africa which shares on trends and the best practices with global benchmark to the industry. In this edition, we take a look at Retail trends in East Africa in reference to our recent maiden Edition of the Retailers forum in Uganda-Kampala. As well as, technology trends for automation and dispensing which has moved a notch higher in Kenya, driven by demand and challenges which have motivated solution providers to be more innovative to satisfy industry needs. Bakery is notably a key driver in In-store diversification, we take an in depth look on what retailers need to remain profitable with a range of equipment driving possibilities and efficiency on the same. In retail events round up, The 1st Edition of Retailers Convention 2015 will be held on 11-12 June 2015 at Safari park Hotel - Nairobi. We welcome you to attend the event. Within the Quarter 01/2015, we managed to reach out to North Rift- Eldoret, Central, and Rift valley Nakuru, Uganda-Kampala and in Quarter 02/2015, we will reach out to Central Kenya Nyeri & Eastern-Meru & Nairobi as above. Our publication is also available online www.insightretails.com and you can subscribe for your hard copy to be delivered at your door step. We wish you all the best in Q2, 2015 as you enjoy the reading...

Reproduction in whole or in part without the written permission of Insight Retail is strictly forbidden. The greatest care has been taken to ensure the accuracy of information in this magazine at the time of going to press, but we accept no responsibility for omissions or errors.The views expressed in the magazine are not necessarily those of Insight Retail or Retail Interchange Centre. Retail Interchange Centre Ltd P.O. Box 36106 City Square 00200 Nairobi, Kenya +254 725 350 690 +254 735 350 690 email: info@insightretails.com www. insightretails.com www.insightpublication.org

Managing Editor – Titus Korir

QUOTE OF THE SEASON “The best way to predict the future is to invest in it...” By Alan Kay INSIGHT #10on|our MAY 15 – AUG Please share your feedback andRETAIL comments publication to 15 retail@insightretails.com TH

, 2015

DISPENSING MACHINES

PRODUCTS ON TAP

DISPENSING IN RETAIL Farm

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fresh pasteurized milk, oil, yogurt Our Products are nowon at tap the click of a button

THE OIL DISPENSIN CONCEPT

IO ISPENSING

n various urban and peri-urban areas off possible avenues for contamination 9 dispensing machines are digi-of handlers nificantly affordable price at strategiof Kenya,urthere is a lot of demand as the numbers are reduced. Onceresidents the milk is in the dispensing for processed butoday, affordable milk city many fast embraced the concept of dispensin tized providing the avenue for have cally convenient location for ease of however, much of it is inaccessible by machine milk shop, workers have no dispensing machines (ADMs) whichaccess have in given clients range ofaccess products majormilk townconsumers in Kenya an the consumers as it isto soldget in packages to it thereby consumer tampering with milk. Behind Italian borrowed concept is stops Farming –at a preserve for a few. fresh the of quality of ADMmilk. Still, ADMs have an affordable rate at the click athe butdone directly like Dispensing – Solu continued to eliminate hawkers despite the dispensing concept further. ton. Allthis that in thepracticeMilk or through industry partners countrywide who bars continue To bridge gapisis required the concept is of toakey milk dispensing which has seen to many frustrating consumerslike by selling low who will install our digital amount one needed spend for the Retailers According to this Geoffrey company’s quality milk atthe high prices and likely to chief executive, retailers can in more households access precious Gitonga, commodity – either Milk, Oil, be Yoghurt or due todispensing machines atknown their store to en- This contaminated hygiene factors. commodity. The edible advent oil, of yogurt milk retailing and fermented milk popularly as ‘Mala’. Indispensed purchasing their milk, consumers can automated dispenser machines (ADMs) Mala and the product will be able consumers access products of their venture into an oil dispensing pilot project. “Our feasibility studies have shown t in various small to large outlets and either buy a new container which many automatically. choice . and quality edible oil,” heADMs explains. outlets stock for a price or use stores today has significantly changed the way milk consumers purchase their own to carry the product. processed milk. aADMs are similar to During recent retailers’ conference Our heldAutomated in Mombasa County, Machines while visiting s Value Proposition to Retailer Dispensing those that are used in dispensing bottles According to Geoffrey Gitonga, the chief further roll the was presented to five replace the value manual oil dispensing Our main aims tooravail essential basic provide distinct benefits to of sodas, candy or evenout tea coffeeconcept by executive of Farming Solutions Limited, the company behind Retailer the ADMs as - anfollows:inserting some consumers coins. enable purchase thesigcommodity. products direct to consumers at Italian borrowed concept, consumers Based on one’s budget or income, can not only purchase affordable and Benefits of Dispensers’ in retail consumers can get their desired quantity hygienic – include pasteurized milk but also of quality farm fresh pasteurized milk. In yogurt, fermented milk ‘mala’ as well as most outlets where an ADM has been cooking oil through the various ADMs installed, consumers are able to get milk that have been installed in most of their for as low as Kshs. 20. Some are able to preferred stores and those near the purchase in large quantities which they residential areas. can store for a longer period depending “Consumers can not only purchase on their usage. affordable and hygienic milk but also Of interest to many consumers is the yogurt, fermented milk ‘mala’ as well as from our dispensers” fact that ADMs have been able to cut cooking oil PRODUCT CROWD PULLER PRICE NO COINS NEEDED

ast embraced the concept of dispensing milk through the now all popular automated hich have given milk consumers an opportunity to purchase clean and affordable ian borrowed concept is Farming Solutions Limited, a company which has diversified

ny’s chief executive, retailers can invest in ADMs not only for milk but also for milk popularly known as ‘Mala’. This quest to diversify has seen Farming Solutions “Our feasibility studies have shown that customers are in need of affordable, clean

in Mombasa County, while visiting some of the local retailers, the opportunity to The automated dispenser REDUCTION The new automated INSIGHT CONSUMER | MARCH to replace the manual oil dispensingincreases practice that the retailers have been using to- MAY, 2015 traffic into your The automated dispenser dispensers are operated shop. Consider this; milk is a must-buy item for most people – this translates into increased sales of other items in the shop.

eliminates the process of packaging, thus allowing for the product to be sold at a much cheaper rate.

using a digital display control panel. One simply needs to input the amount required and the product is dispensed.

A sm co li on is v

Celian House, Embakasi Village N Mezzanine Floor, Room No. 6

+254 722 249 600 www.farmingsolutionsltd.com

NO COINS NEEDED The new automated dispensers operated Tel: +254 722are 249 600 using a digital display control panel. One simply needs to input the amount required and the product is dispensed.

+254 722 249 600

nser ss of ng for d at a e.

AFFORDABILITY Automated dispensers sell small quantities of essential commodities (like milk) for as little as Kshs. 1.00. This not only makes it affordable but is able to cater for clients on varied budgets and needs.

ECO-FRIENDLY The automated dispensers are eco-friendly as the customer can reuse or refill using plastic or glass containers. This reduces pollution of the environment.

INSIGHT RETAIL #10 | MAY 15TH – AUG 15TH, 2015

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LEASING IN RETAIL

INSIGHT RETAIL #10 | MAY 15TH – AUG 15TH, 2015

FINANCING IN RETAIL

Should your business lease or buy equipment?

ach business is unique and the decision to buy or lease is made on a caseby-case basis. Leasing equipment can be a good option for business owners who have limited capital or need equipment that must be upgraded every few years, while purchasing can be a better option for established businesses or for equipment that have a long usable life.

passes the burden of obsolescence onto the lessor. One is free to lease new, higherend equipment after the lease expires.

Advantages of Leasing Equipment Leasing business equipment and tools preserves capital and provides flexibility but may cost more in the long run.

Disadvantages Leasing an item is almost always expensive than outright of purchasing the equipment/assets.

The primary advantage of leasing business equipment is that it allows you to acquire assets with minimal initial expenditure. Because equipment leases rarely require a down payment, one can obtain the goods he needs without significantly affecting his cash flow. Thirdly, lease payments are usually deducted as business expenses on one’s tax return, reducing the net cost of the lease.

Leasing doesn’t mean ownership; neither does one own it nor builds equity in the equipment. Unless the equipment has become obsolete by the end of the lease and you are given the option to buy the assets at residual value.

Leases are usually easier to obtain and have more flexible terms than loans for buying equipment. This can be a significant advantage if one has a bad credit or needs to negotiate a longer payment plan to lower his costs. Leasing allows businesses to address the problem of obsolescence. If one uses his lease to obtain items that may be outdated in a short period of time, such as computers or other high-tech equipment, a lease

Leasing helps the liquidity position of the organization and lowering tax payable by the company hence improving the capex ratios thus improving the borrowing powers of the entity based of financial records

Still, one is obligated to make payments for the entire lease period even if he stops using the equipment and in cases leases are given the option to cancel the lease if the business changes direction and the equipment leased is no longer necessary, but this option may also attract some termination fees based on leaser’s agreement. Buying Equipment The most obvious advantage of buying business equipment is that you gain ownership of it. This is especially true when the property has a long useful life and is not likely to become technologically outdated in the near future.

INSIGHT RETAIL #10 | MAY 15TH – AUG 15TH, 2015

Still, the higher initial expense for some people, purchasing business equipment may not be an option because the initial cash outlay is too high. Even if one plans to borrow the money and make monthly payments, most financial institutions require a down payment of around 20 percent. Borrowing money may also tie up lines of credit, and lenders may place restrictions on one’s future financial operations to ensure that one is able to repay the loan. Although ownership is perhaps the biggest advantage to buying business equipment, it can also be a disadvantage. If one purchases high-tech equipment, he runs the risk that the equipment may become technologically obsolete, forcing him to reinvest in new equipment long before as planned. Certain business equipment has very little resale value. Buy or Lease? When deciding whether to buy or lease a particular piece of business equipment, try to figure out the approximate net cost of that asset. Be sure to factor in tax breaks and resale value when making this calculation. After determining which option is more cost-effective, consider other intangibles such as the possibility that the product will become obsolete (if you are considering purchasing) or that your need for the product will expire before the lease does (if you are considering leasing).

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RETAIL TROLLEYS

What’s all the fuss about a shopping trolley? M

ost people think that a trolley is a trolley is a trolley. But to us it’s like saying all cars are built the same. Cape Gate has been delivering quality wire products to the retail industry since 1929 and we believe that a lot more goes into building a quality trolley than meets the eye. The structural design of a trolley is paramount and requires rigorous testing. Cape Gate offers a complete range of tried and tested designs of the highest quality steel and superior welding. In addition the steel is electroplated and coated with a durable clear lacquer. On each of our specially designed trolleys we took care to stipulate the correct wire diameter and wire spacing to meet specific retail requirements. The load-bearing base of a trolley is all important and has been given special attention from our structural engineer. The back gate of Cape Gate’s single basket trolleys is of superior design and fit. Then, one of the most important aspects of a quality trolley is its castors and wheels. Cape Gate uses only the finest TENTE castors and wheels that houses precision bearings in 2.5mm metal housing for the smoothest and most reliable performance. A quality brand is one that has stood the test of time and Cape Gate is one of South Africa’s market leaders in the steel industry with over 85 years of

INSIGHT RETAIL #10 | MAY 15TH – AUG 15TH, 2015

experience in delivering quality products at competitive prices and outstanding service to wholesalers and retailers throughout Africa. The company’s main factory is located just outside Cape Town, close to major air, sea and rail ports. This means that Cape Gate is well placed to serve both national and international markets. At Cape Gate we believe that your customers deserve the best quality and durability and that you, the retailer, deserve consistency and reliability from our products and service. For an electronic catalogue of our complete range of products, Contact us on: Tel: +27 (21)937 7123 Email: ctsales@capegate.co.za elfrieda@capegate.co.za

INSIGHT RETAIL #10 | MAY 15TH – AUG 15TH, 2015

TECHNOLOGY INNOVATIONS & TRENDS

Vortex Solutions in Retail Industry Combine Insight and Action to get results in Automation e at Vortex solution will monitor the entirety the processes for your business and with our solutions VortexRetail solution & VortexFusion ERP Solution, we bring you the best-in-class solutions with vast experience earned working with customers as we change the way you run your retail store more efficient and effectiveness.

Simplify operations with an integrated business management system (ERP) VortexFusion ERP is a comprehensive enterprise business management suite designed to improve the efficiency and effectiveness of key organizational functions in the areas of financial management, human capital management, procurement, and analysis. You get advanced process automation, mobile access, analytics, and social collaboration capabilities built into your most important business functions. VortexFusion ERP at a glance • A comprehensive solution for financial management, human capital management, procurement, and analytics

• Integrated tools for collaboration within departments • Embedded analytics • Advanced reporting capabilities • Workflow, alerts, and role-based dashboards • Flexible deployment options, either on-premise or in the cloud • Industry-specific capabilities • A simple, elegant user interface • Mobile capabilities Retail Module Vortex Fusion streamlines financial, procurement, and budgeting processes for the retail industry, resulting in improved financial discipline, increased internal controls, and reduced costs. Unique industry features include bill splitting, bill aggregation and customer self ordering through mobile and tablets and many more.... Highlights of the Module • Simplify the overall business of running a hospitality business • Split customer bills • Aggregate bills in a table • Integrated rooms management Retail POS solution designed for your unique needs With VortexRetail, you’ll have

INSIGHT RETAIL #10 | MAY 15TH – AUG 15TH, 2015

information on your buying, supply chain, merchandise inventory, physical assets, and the details on your customers and workforce, all linked together. And you’ll have all the tools— analytics, mobility, visualization, and collaboration—to make sense of it all, get critical information to the right people, and discuss it in real time. Operational efficiency Legacy systems make it difficult for you to realize the efficient processes and comprehensive view of the business you need. VortexRetail allows you to leverage a fully integrated business management solution that helps automate and streamline the end-to-end management of key retail functions like budgeting, cash flow, invoicing, and hiring. Proactive detection Get sophisticated cross-platform monitoring and detection capabilities that allow you to quickly identify fraudulent payments, reduce administrative efforts, and potentially prevent theft. With VortexRetail you can set access to ensure internal controls, view anomalies and duplicates, and better manage critical transaction types such as payroll and accounts payable invoices.

DISPENSING IN RETAIL

Technological Trends In Dispensing

enya is known as Africa’s most developed retail market thanks to the like minded individuals who drive the force to impact others by finding solutions that make a difference in people’s day- to -day lives. This is through Innovations in business models which have increasingly revolutionized the way business is done, therefore, building a sustainable advantage in a market place defined by unrelenting changes and trends, escalating customer demands and a wave of competitiveness that a retailer should keep up with to gain an edge in strategically capturing the demands of the consumers. One of the innovations driving the growth is the dispensing technology which was introduced in 2007 by Antonio Magnaghi’ and other industry stakeholders. This technology was intended to give solutions to farmers where they could readily sell their produce and to the locals who could buy products at a cost effective price. The dispensers come in different varieties. For example, 1. Milk dispensers – This improves the quality of milk and makes it safer for consumption as compared to table- top vendors.

The milk is also pasteurized and there are lesser chances of cross contamination because no one comes in contact with the milk. The concept has been appreciated and an uptake of daily milk consumption has risen from 12,000 liters to Over 100,000 liters per day. 2. Cooking oil – This includes corn oil, sun flower oil, olive oil and all the other liquid oils available in the market. This concept is useful because consumers have the opportunity to buy based on the amount of money they have. This technology brings a healthy option because there are no heat extractions from the oil. 3. Soap – This mostly targets home owners who use fabric softeners, dish washers and all other home use applications. 4. Water – Water is the most essential commodity in a human’s life but sometimes the availability of this product is wanting. Water dispensers have brought the ease of accessing it at any purchase either in large or small quantities. There is also the preference of acquiring it either hot or cold. 5. Juices – This presents the consumer with a multitude of varieties to choose from but the most common is the three flavor multidispenser.

6. Honey – the quality of honey to consumers is very important. The dispensers are a guarantee that the product is fresh and of high quality. “The success of the Dispensing concept in Kenya for any business is to understand the customer needs and have constant & quality supply of the products.” Effective innovation integrates an understanding of how consumers live, buy and use products. Overcoming distribution challenges will depend on how consumers will appreciate the concepts of new combinations of products that are easy and readily accessible, customized and personalized to meet the consumers demand. For dispensing technologies and as the pioneer of the concept he is looking at the advancement of his technology to offer even more. For instance; • Prepaid solutions where consumers can use recharged cards and loyalty cards. • Barcode systems which will generate labels scanned at the point of sale. • Remote controls system that will provide back office connectivity. • Consumers can still buy through their smart phones, Pc’s and tablets.

0722 200665 africa@lattebox.net

milk, cooking oil,detergents, water

PIONEERS IN MILK ADMS IN KENYA AND AFRICA DISPENSING EQUIPMENT WITH PAYMENT SYSTEMS (COIN, NOTES)

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REMOTE MONITORING VIA MOBILE DIVICES WE SERVICE ANY TYPE OF DISPENSER UPGRADE SERVICE AVALIABLE

AFTERS HOUR TECHNICAL SUPPORT 7 DAYS A WEEK INSIGHT RETAIL #10 | MAY 15TH – AUG 15TH, 2015

RETAIL SECURITY TIPS

Shrink Management Why I Love Why I Love Why I Love I Love In Why Retail Retail?

Retail? Retail? Retail?

AFFORDABLY AFFORDABLY AFFORDABL

TRUSHAR KHETIA Founder & CEO – Tria Group TRUSHAR@trushark KHETIA

ISSN 2305-5561

December

2014

MEDIA PARTNER:

Leasing transforms retail sector

- Case study outlook TRENDS GLOBAL LOYALTY LOYALTY TIPS Dispensing trends in Retail RETAIL & SAFETY - MilkHEALTH , Water & Cooking oil LOYALTY MARKETING Retail Technology trends RETAILER ASSOCIATION - Omni-Channel retailing

TECHNOLOGY TRENDS PART OF THE

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INSPIRATIONAL SPEAKERS INCLUDE:

RETAIL FINANCING 2 OPTIONS 4th

in East Africa

RISK MANAGEMENT Leasing transforms retail sector TANZANIA ON:TECHNOLOGY FRANCIS MASWILI - CaseMOVING study outlook TRENDS IN Dispensing trends in Retail & AUTOMATION DISPENSING

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SHRINKAGE IN RETAIL + RETAIL EVENT UPDATES RETAIL INTELLIGENCE BAKERY INNOVATIONS SHRINKAGE IN EAS TECHNOLOGY RISK MANAGEMENT RETAIL MOVING ON: FRANCIS MASWILI

- Milk , Water & Cooking oil

Retail TechnologySECURITY trends IN RETAIL

December

2014

Thiagarajan Ramamurthy

RETAIL INTELLIGENCE EAS TECHNOLOGY INSIGHT RETAIL #10 | MAY 15 RISK MANAGEMENT MOVING ON: FRANCIS MASWILI

EDITION 03 | APR - JUN, 2015

556001

RETAIL BUSINESS INTELLIGENCE DEFINING REGIONAL STRATEGIES

ISSUE 08 / OCTOBER - DECEMBER 2014

Unlocking Africa’s retail opportunities BE PART OF THE DISCUSSION BOOK TODAY TO RECEIVE 15% DISCOUNT | QUOTE: AFRA15 T: +44(0)203 033 2020 W: www.retailcongressafrica.com E: info@retailcongressafrica.com

Hospitality Furniture

Automation Bakery innovation & Insights + Loyalty program evolution in retail

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ISSUE 3 COMING SOON

Restaurant Leasing transforms retail sector

Trends

- Case study outlook

Dispensing trends in Retail

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INSIGHT RETAIL | ISSUE 08 | INSIGHT OCTOBER RETAIL - DECEMBER | ISSUE2014 08 | OCTOBER - DECEMBER 2014

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Innovation CRACKING Bakery innovation & CUSTOMER in inRetail evolution retail LOYALTY RETAIL

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shrinkage and related data in their organizations. This in turn will significantly the RETAIL business owner better returns. 18 give INSIGHT | ISSUE 08 | OCTOBER - DECEMBER 2014

UPCOMING EVENTS: RETAIL BUSINESS INTELLIGENCE CENTRAL REGION EASTERN REGION

13-14 MAY ‘15

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to force an interest on themselves. don’tthey choose Jeff Bezos, Amazon.com, Founder &You CEO “One of the huge mistakes “One of people the huge make mistakes is that people trymake is that they try your passions; passions you. ” on to force an interest to on force themselves. an You don’t choose forYou don’t choose • Employee theft - your Internal theft ischoose theinterest number onethemselves. problem ‘Am IAmazon.com, whatpassions I am most passionate always Jeff Founder &are CEO CRACKING yourBezos, passions; your your passions; choose your you. ”passions chooseask you.” shrinkage; this doing isthis because employees notabout?’ closelyIup. monitored CUSTOMER myself question every single day I wake Jeff Bezos, Amazon.com, JeffFounder Bezos, Amazon.com, & CEO Founder & CEO LOYALTY as compared to the shoppers. 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That is my can vision, my wish andcan my hope that this business Retail change the| Retail entire landscape change of the country. entire landscape That of a country. That Embedding loss prevention like having aastrategic develop18 INSIGHT RETAILmeasures ISSUE 08 | OCTOBER - DECEMBER 2014 can bevision, the start something that hasbusiness amy huge is my myofwish is my andvision, myamazing hope mythat wish this and hope that this business ment process and standard operating procedures is the way to tackle impact Society. It isbe about leaving legacy can be on theour start of something can theamazing start of athat something hasbehind. a huge amazing that has a huge this battle. Retailers should have a unified comprehensive view on a legacy behind. impact on our Society.impact It is about on our leaving Society. a legacy It is about behind. leaving

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CEO Triabiggest Group etailFounder theft is &one of–the problems facing retailers and can TRUSHAR KHETIA TRUSHAR KHETIA @trushark Founder & CEO – TriaItGroup Founder & CEO – Tria Group amount to huge losses. is therefore, important for retail owners @trushark @trushark to clearly establish the loopholes and generate a mechanism that “One of the huge mistakes people make is that they try will deal with the are on thethemselves. major causesYou of shrinkage and to problem. force an Here interest don’t choose how you“One can avert them. of the huge mistakes peoplechoose make is that your passions; your passions you. ” they try

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RETAIL FINANCING

INSIGHT RETAIL #10 | MAY 15TH – AUG 15TH, 2015

RETAIL TRENDS

The formal retail has come of age Nothing but a bright outlook in the retail space

By Thiagarajan Ramamurthy

of informal retail players to the formal space. Through a Retail sector development policy, Mama Mboga, will get the deserved recognition and support for her endeavours.

n the last three decades, formal retail operators in Kenya appear to have grown from strength to strength. The local operators have effectively managed to scratch the surface placing the country on a very good position as far as the continental retail space is concerned. Basing my arguments on the Kenya Economic Survey 2015 that indicates that the country’s GDP expanded by 5.3% in 2014, it’s crystal clear that the retail sector is fast emerging as a key economic growth pillar. It is no mean feat for the Wholesale and Retail trade sector to be managing an 8.2% share to GDP and 9.8% contribution to GDP growth. This clearly means that this is a sector which is now in the top three echelons of the most important growth contributors in this economy after the Agricultural, forestry and construction sectors which are contributing 14.5% and 11.1% growth. Economics aside, there’s no denying that the local retail sector has produced some of the most formidable home grown retail entrepreneurs’ ready to conquer the continent. Ours is a market that is growing both vertically and horizontally with retail emerging as a lifestyle need.

The success and sustainability of the retail, business depends on its positioning and the differentiation it creates on an ongoing basis. Since the market is very dynamic and open to the world, it is critical for the existing businesses to keep pace with the technology and the fashion trends which determine the future.

n Peel fruit juices produced by Kevian Industries in Kenya. By far, Farmers Choice products stand; head over shoulders above many of their global peers. Small wonder then that formal retail growth brings a lot of augmented benefits to the economy. From direct and indirect employment opportunities, local manufacturing, value addition to fostering regional trade and cohesion.

More and more customers are choosing a destination for shopping with complementary entertainment, food, banking, medical, and other services. This has spurred the growth of malls with huge investments in real estate development.

On another front, the retail sector is also fuelling real estate development and consequent business growth for the property development, building and construction industry.

It has also opened up an opportunity for branded food outlets, and related services to similarly follow the trend and grow on, to become reputable chains. Indeed, restaurants and pharmaceutical retail chains are following this trend.

Kenyan retailers have been very aggressive in terms of expansion and adopting the global best practices to position themselves strongly in the region. They have established unique supply chain models which can sustain their future expansion.

Attesting to the fast growth of the sector, the formal retail has improved the quality of Kenyan produce, packaging and development of various new retail categories and products. Indeed faced by the stringent demands of a globalized consumer, most of the locally manufactured products are now benchmarked against leading global brands.

There’s no denying that in the next five to ten years, the local formal retail penetration is likely to top the 30% mark with revenues of more than US$ 8billion per year. The informal retail players will continue to dominate the retail space. However, the formulation and adoption of a Retail Sector Development Policy by the government can help transform the retail sector.

In some markets, the local brands dominate over the global brands. For an example, WhiteDent Toothpaste in Tanzania and Pick

Such a policy complete with realistic incentives for local retailers can further help to catapult and accelerate the transformation

INSIGHT RETAIL #10 | MAY 15TH – AUG 15TH, 2015

More and more people becoming brand and price conscious, the retailers have no option but to explore cost effective supply chain partners with a handful of franchises to cater to its customers. The ALL UNDER ONE ROOF, concept makes sense to the customers which inspires retailers to open up hyper stores. Customers, increasingly armed with a global viewpoint will continue looking for convenience in terms of location, time, and parking facilities, besides the retail brand which is customer centric and stock products to fulfil their needs. In the retail race, the winning retailer will always be the brand which… • Connects with its customers and value their patronage. • Is serious about its social obligations. • Spurs economic growth. • Make sense to its customers. • Believes in loyalty and offering the best value proposition. • Differentiates itself from others. • Connects with the community at large. • Is credible. • Growth strategy is sustainable. • Has a vision.

“The future of retail business is not only looking at the numbers but it’s positioning for growth and sustainability with core values”

TECHNOLOGY INNOVATIONS & TRENDS

KENYA | Karuna Hse Commercial/Enterprise rd Junction Industrial Area, Nairobi Tel: +254.728 607 000 e: info@securityworldtech.com UGANDA | Ntinda Ind. Area Plot M275, Opp, Britania Kampala Tel: +256 414 223 1767 Cell: +256 782 115 464 e: info@securityworldtech.co.ug RWANDA | Kigali , Remera, Kisimenti Tel: +250 252 581 741 Cell: +254 788 382 626 e: info@securityworldtech.co.rw TANZANIA | Hifadhi EPZ Ubungo, Off Morogoro Rd , Dar Es Salaam, Tel: +255 22 277 3391 Cell: +255 767 607 000 e: info@securityworldtech.co.tz

INSIGHT RETAIL #10 | MAY 15TH â&#x20AC;&#x201C; AUG 15TH, 2015

UGANDA RETAIL OUTLOOK

The Advent of Retail Industry in Uganda

By Martin Okumu - Head of Communication Department, Uganda National Chamber of Commerce & Industry

ampala residents were not used to security checks when going for shopping. This changed with the advent of shopping malls in the early 2000s when South African giantShoprite opened its first mall at the busy Ben Kiwanuka and Entebbe Roads junction in Kampala, followed by the entry of many Kenya based outlets: Uchumi, Nakumatt and Tuskys among others which has changed the retail landscape in Uganda’s Major towns. Our local retailer has not being left out on the transformational changes in retail as witnessed by Capital Shoppers, Standard Supermarket and Quality Supermarket over recent years. Shopping malls are on the rise in Kampala and security has become a major concern both to the shopper and retailer especially after terror attacks that have been witnessed in the region. It has become important to set up security measures like the use of cameras, metal detectors and alarms. This facilitates monitoring of customers moving in and out of the shopping malls and secures the goods displayed while the use of barcodes in retail has also been beneficial to the retailer to improve efficiency in operation and theft prevention measure. It is said that change is inevitable and so are skeptics. While others appreciate the efforts to bring security, a few have invented myths about the metal detectors at the entrance to malls attributing it to causing cancer and other bodily harms. This clearly indicates poor consumer awareness.

Mr. Martin Okumu, Head of Communication Department UNCCI receiving a certifiate from Mr. Titus Korir Director Insight Retail East Africa Limited during the 1st Retailers forum in Kampala - Uganda.

It is for this reason that Uganda National Chamber of Commerce & Industry together with Insight Retail East Africa organized a workshop recently for the Retail business community in Kampala to educate them on the usefulness of adopting technology in regard to automation and security aspect for retailers to adopt and get more information on current trends globally, not forgetting experiences shared by retailers like Nakumatt/Uchumi / New City & Standard Supermarket, Ebenezer Stores, Divine & Sun Mutual Supermarket among others not forgetting Solution providers which included Security world Technology Ltd, Hipora Business solutions, Compulynx Ltd and Nairobi Kitchen Care/Kampala Kitchen Care among others. As we experience economic growth, there is no way we can avoid automation, electronic monitoring devices and machines generally to expedite retail,

MORE STATISTICS

INSIGHT RETAIL #10 | MAY 15TH – AUG 15TH, 2015

especially in big shopping malls for the mutual benefits of the Investor’s and Shoppers/customers. In conclusion, we will work hand in hand with all partners both in the public and private sectors to ensure that we build capacity for our trades across the Ten(10) districts in Uganda and thanks for the Initiative by Insight Retail East Africa for we believe the same will drive the adverse growth in the country to transform Informal to formal business operations if owners of the business will uptake the knowledge gained in the conferences or workshops to improve their businesses to operate effectively and efficiency by adopting current technology solutions such as Inventory management/Automation through to point of sale (POS), Security solutions, Deploy innovative diversification in retail like Bakery, Deli’s and getting to hear from the peer retailers on experience which they have deployed in years to build success.

BAKERY INNOVATIONS

Antonio Food Innovations

he rush for convenience in the 21st century is the source of many inventions we enjoy today. When it comes to the practice of preparing and serving food in restaurants and eateries Antonio food and innovations are on their own league.

too many products is a high cause of food contamination and also one would rather have a menu they have mastered and give the consumer the right quality of the item which will guarantee loyalty from customers who will even come from far because they prefer that item.

Antonio Magnaghiâ&#x20AC;&#x2122;, the pioneer in Kenya has successfully built a business model for his products in In-store bakery and ingredients for food innovations, thus enabling him to enjoy a good return from his investments.

It is important to develop a formulation process for your product; clear strategic plot of how you are going to prepare the product. The application of this in store service should be of standard and well understood by its partakers.

He tells us that his secret majorly lies on the knowledge of his products which enables him to determine the right market for a particular product, and create variety within the same product, giving the consumer a range of varieties.

That is why personnel training is important to minimize on mistakes and lower losses. This will in turn maintain the quality of your product as well as add value to it in regards to the hygiene concept that comes with food handling. Also, having the correct ingredients provides for consistency and improves on quality, a lot of additives and preservatives could affect the trends

He however, notes that specialization is key, and one should limit his product range. This is for the fact that having

because of health implications. On the other hand, it is important for retailers to remember that, using locally available raw materials creates consumer acceptability of the product as opposed to the use of foreign elements which lack a local taste unless your target is the foreigner. As an expert in research, development and application, Antonio emphasizes on the need to embrace modern and efficient equipment. The choice of the right equipment is ultimate to warrant for optimum results. This is critical in achieving quality, quantity and efficiency. He offers an array of consultancy backing in product range, consumer acceptability survey, facility layout design, recipe formulation and R/D concept development. He says the solution for driving sales is to get it right through research and innovation, automation and specialization.

bakery world Products & Services Ingredients Recipe Formulation Research & Concept Development Bakery Design Layout(production & Sales)

TROUBLE SHOOTING

TEL. 020 6559474 & 0733 236 749

EMAIL: bakeryworld@euroingredients.net INSIGHT RETAIL #10 | MAY 15TH â&#x20AC;&#x201C; AUG 15TH, 2015

UGANDA RETAIL OUTLOOK [Across the East African region, the Pearl of Africa country of Uganda is fast emerging as a retail investorâ&#x20AC;&#x2122;s destination of choice. Insight Retail East Africa caught up with, Nakumatt Uganda Limited, Country Leader, Mr. Sameer Shah during the recent 1st Edition of Retailers Forum held at Hotel Africana in Kampala who shared with us some of the insights that have made Nakumatt a runaway success in Uganda.] What is the background to Nakumatt establishment and when did you begin operations in Uganda? Established in 1987, we have shaped and built our business on our founding principles of providing a variety of affordable, quality brands as well as excellent and superior service to our customers. Our formats include convenience stores, supermarkets and hypermarkets. We serve over 100,000 customers per day and offer a range of over 75,000 products. At Nakumatt Holdings, we passionately believe in active social engagement with our customers and our environment, and have ensured it constitutes a core part of our business. We continue to spearhead various community development projects in health, entrepreneurship, sports, culture, environment, education and urban restoration. We have worked hard to build solid relationships with our customers, employees, suppliers, corporate partners and with the East African community at large. This has contributed to our impressive roll of honour, which includes prestigious and coveted local and international accolades. What is the capital portfolio, and how many people do you employ in Uganda? Nakumattâ&#x20AC;&#x2122;s capital portfolio is currently privately held thus not publicly declared. However, we have directly invested more than US$ 20 million in establishing and aligning all our 8 branches to Nakumatt standards. Nakumatt Uganda, officially opened its round the clock business in April 2009 with our flagship store opening at the Oasis Mall. Back then, our initial investment was valued at more than US$3Million. In 2010, we managed to further expand our services after acquiring former Payless Supermarkets branches at Bukoto and Bugolobi. Since then, we have extended our footprint Mbarara and Entebbe and also enhanced our Kampala operations. We have also invested heavily in skills transfer programmes, supplier market development programmes as well as statutory remittances in terms of taxes and revenues both to the local government and the exchequer. Our commitment is to continue investing in Uganda as a tribute to the overwhelming support extended by the beloved Uganda citizens. By all means, we are the fastest growing retailer in Uganda thanks to our

Titus Korir (Insight Retail) and Sameer Shah Nakumatt Uganda Country Leader chat during the Retailers forum in Kampala, Uganda.

loyal customers support. Across the region, Nakumatt Holdings currently operates 53 branches across East Africa. We have a staffing force of more than 7,500 team members employed directly making us one of the largest formal employers in this region. What were some of the major reasons that influenced you to spread wings to Uganda? Nakumatt, was attracted to Uganda, primarily by the conducive investment climate and stable economic policies which are constantly under review. Our attraction was also based on our commitment to support the ongoing East Africa Community integration ideals. What major unique products and services does Nakumatt offer to Ugandans? Nakumatt Uganda, enjoys a number of unique selling points that easily places it many steps ahead of our competitors. Firstly, we maintain a one price policy across all our branches. This means you can enjoy competitive prices whether shopping at Nakumatt Bukoto, Nakumatt Bugolobi Nakumatt Entebbe or any other Nakumatt branch. At the same time, Nakumatt customers enjoy the advantages of the best loyalty scheme in Africa otherwise known as the Nakumatt Smart Card. The Nakumatt Smart Card loyalty programme is the most advanced customer reward

INSIGHT RETAIL #10 | MAY 15TH â&#x20AC;&#x201C; AUG 15TH, 2015

system which allows our customers to enjoy smart points for their purchases. These points can be redeemed against a variety of products and services including school fees cheques. We are also the only retailer who maintains 24Hour branch operations offering real shopping convenience. Within the region, we are also consciously promoting the use of reusable bags as part of our environmental conservation and sustainability plans. On the other end, we take pride that we maintain an unmatched degree of customer service only achieved through continuous training of our staffers to maintain global customer service levels. How do you ensure that all your products are genuine and up to the required standards? At Nakumatt Uganda, we have adopted world-class quality standards which are integrated in all our processes. This fact is attested by our ISO 9001:2008 certification by UNBS. For a start, we ensure that we sift substandard products by maintaining a roll of credible suppliers who are committed to meeting quality standards. We also insist on quality certifications for all products whether sourced locally or internationally. At all times, we also maintain a clear traceability path for all products, particularly food products. As a regional retailer, we have been actively seeking global certifications for

UGANDA RETAIL OUTLOOK

Insight Consumer Magazine Launch all our operations in Kenya, Uganda, Rwanda and Tanzania. As a regional player, we are proud of the fact that we are one of the few leading corporates that have regional ISO certifications. There have been allegations that majority of the products that you deal in, right from agricultural, are imported from Kenya, a move that would otherwise jeopardise many Ugandan farmers’ prospects who had hoped to reap from your opening shop here. What is your opinion? These allegations are unfounded. We have been providing a market for Ugandan agricultural products and hardly import any produce from Kenya. Indeed, attempts to import fresh produce from any other country would be a logistical nightmare and not cost effective for us. For this reason, all fruits and vegetables save for imported apples, grapes and oranges are grown in Uganda. All imported products are also readily indicated on the label such as Imported Kiwi fruits. Any other thing that you would like customers to know about your business operations? We are proud to be associated with progressive public institutions such as UNBS. UNBS has been one of our key operational partners. We enjoy a mutually beneficial working relationship that has enabled us to jointly consult and run joint programmes. By virtue of our core mission as a retailer, we are essentially UNBS watchdog partner. This means we must be at the forefront in ensuring that we only stock products that have been certified by UNBS. On this score, we also assist local and international suppliers to meet UNBS standards and provide them with pertinent information as relates to Quality standards in Uganda. Indeed, a supplier who does not meet UNBS standards has no place seeking to sell anything through Nakumatt Uganda. This is an undertaking that we strictly adhere to as part our commitment to maintain the partnership relationship we enjoy with UNBS. It’s also instructive to note that Nakumatt Holdings is a globally acclaimed retailer. In 2009, the authoritative retail sector research house Planet Retail adjudged Nakumatt as the 2nd Most Innovative Retailer in the World. In recognition of Nakumatt’s commitment to regional integration, we’ve also been awarded the East Africa Community’s East Africa Investor of year 2011 award.

Robinson Murage, Jumia and Titus Korir, Insight Retail East Africa

he insight consumer magazine was launched on the 15th May in a colorful breakfast meeting that was organized by Insight Retail East Africa at the Ole Sereni hotel. Among guests invited were representatives from Nakumatt, Naivas, Tumaini, self Service ltd, Society stores, Security world ltd, Pergamon group, Bobmill, Nairobi kitchen, Cleanshelf, Rentco EA, Jumia, Total solutions, Home matt, among others. The current retail market is vast and consumers are usually faced with an overwhelming bombardment of ideas and thoughts when it comes to making the right purchases. The consumer magazine is dedicated to enlighten the shopper on the prod-

ucts, services, financial solutions as well emerging trends that could be of value to them. The magazine is a quarterly publication distributed freely in selected retail stores in Nairobi as a pilot program and will later be rolled out to other major towns in the country. Esteemed suppliers are welcome to engage this platform to further build their brands among their targeted consumers while showcasing their products and services. Among scheduled areas of interest for publication include: • Consumer brands. • Education. • Property management. • Healthcare. • Finance and insurance. Readers can also enjoy an online edition from www.insightpublication.org

Michael (Cleanshelf), Moses (Tumaini), Titus (Insight Retail) and Trushar (Society Stores)

INSIGHT RETAIL #10 | MAY 15TH – AUG 15TH, 2015

TECHNOLOGY TRENDS

Silver Solutions for Retail

ilver Greens Ltd was established in 2011 with only one objective in mind – unparalleled customer satisfaction. Our directors comprise of individuals who have been working in the ICT industry and have collective experience of over 30 years in this industry within East Africa.

Our idea is simple yet efficient, dynamic and cost effective system that will help you turnaround your business and give you value for money… This is the confidence we have in our products that we are the ONLY company in East Africa to give you a MONEY BACK GUARANTEE on all our products… We provide a various array of solutions suitable for any size of business. 1. Software Solutions Retail, multi branch, warehouse, stationery shops, small to large supermarkets, F& B, Hotel Management and many more…. Silver Greens Ltd is a one stop all in one solution provider in the business of automating your day-day business process and providing you with a completely simple, effective efficient and dynamic system complemented with a very strong and powerful security system. We are one of the very few companies who provide complete ‘end-end’ software solutions – which means that our most basic software covers the following modules comprehensively; •

Complete Sales Module

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Complete Purchase Module

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Complete Inventory Module ( For F&B: including food costing, recipe management and Menu Engineering)

•

Complete Finance Module – all the way to the trial balance, profit and loss accounts and balance sheet for your company.

Some of our attractive features for Retail Industry include: a. Warehouse management for multi branch b. Loyalty solutions

c. Head Office to branch model d. Multi-level pricing e. Automatic discounting (if defined) f. Multiple barcodes g. Matrix systems h. Stock management via re order levels, reorder qty. i. Pivot reports for MIS. We provide complete automated end-to-end solutions for restaurants, bars, hotels, cafeterias, supermarkets and retail apparel stores whether you have one small branch or a chain of properties - we have the solution for you. 2. Security Solutions We provide a range of security solutions to retail industry as follows: a. Anti-theft devices for supermarkets b. RFID solutions c. Biometric solutions d. State of the art security, surveillance and access control systems. e. Electric fencing, heavy duty gate barriers, biometric / card based access control to doors and buildings and CCTV implementation, we deal in only the best quality equipment and back up with up to 2 years of local warranty – a testament to the quality we invest in. CONTACT US:Tel: +254 733 777919, +254 721 714624 +254 722 733785 (Sales) Email: sales@silvergreensltd.com www.silvergreensltd.com Office No. 7, Ground Floor - Almond Court, 3rd Parklands, High ridge - Nairobi

INSIGHT RETAIL #10 | MAY 15TH – AUG 15TH, 2015

Restaurant Software iPad Ordering Recipe, Variance & Food Costing

Retail Software

Home Delivery Table Reservations

UPC/ EAN GS1 Barcode Compatible

Happy Hours Pricing

Fast, Slow and Non Moving Items Scheme and Promotions CRM, Payroll and Accounts Franchise Management

Software for Hotels/ Motels/ Lodges/ Resorts, Standalone or chain management. Complete Accounting.

FusionResto enhances guest experience by improving service with easy to use touch screen pos, mobile based ordering and automatic kot printing

CCTV Surveillance , low budget to high end cameras. Makes include Samsung and AXIS

Time and atttendance solutions. Electric Gates, Electric Fence & Parking Solutions.

For restaurateurs who own standalone restaurant or a chain, RanceLab , FusionResto is a ready to use restaurant management software that provides

Point of Sale

Mobile Order

Recipe & Food Costing

Store Management

Menu Engineering

Table Reservations

Financial Accounting

Payroll & Attendance

Loyalty programs

Simplifying Restaurant Buisiness

W WINHMS Hospitality RedeďŹ ned

simplifying hospitality businesses

simplifying restaurant busisnesses

Call us on +254 733 777919 / +254 722 733 785 / +254 738 768378 / +254 721 714624 / +254 736 952585 and see how we can provide a solution for your business. Email us on : info@silvergreensltd.com/ sales@silvergreenslttd.com For more information , visit our website www.silvergreensltd.com

INSIGHT RETAIL #10 | MAY 15TH â&#x20AC;&#x201C; AUG 15TH, 2015

RETAILERS CONFERENCES in pictures NORTH RIFT REGION FEBRUARY 2015

2015

Retail Conference brought to you courtesy of:

ELDORET

Retail Conference brought to you courtesy of:

Retail Conference