Despite the financial difficulties faced by the East African region's largest grocery retailer Nakumatt, this does not dampen our view on the region's consumer spending potential. Kenya, in particular, remains our top consumer market in East Africa, supported by rising consumer spending growth and growing investment from international retailers.
The luxury goods sector is poised for robust growth in Kenya, driven by the country's rapidly expanding wealthy consumer base. Kenya is well-positioned to accommodate multinational conglomerates seeking to establish a footprint in the emerging sub-Saharan Africa (SSA) luxury market. We believe increased purchasing power, as incomes rise and the entrance of new luxury products and retailers will...
Kenya has been one of our outperforming consumer markets over 2015 and 2016 and is set to accelerate further in 2017. That being said, we note that our forecast is tempered by rising oil prices, a slowing economy and the risk for uncertainty with the August 2017 election. We believe that spending is not hitting its high potential, with risks pointed to the downside over the coming year.
Kenya is the most likely Sub-Saharan African market, other than South Africa, to receive equity investment or experience acquisitions in its retail sector, which is far more developed than most others in the region. Global majors are likely to invest heavily in Kenya by 2019 - the length of our forecast period.
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Thanks, BMI Research