PEP cuts prices for all products by 30% as store plans to exit country

Kampala, Uganda |  THE INDEPENDENT | PEP, the clothes retailer has cut prices of all its products by 30% at all outlets in Uganda as the store plans to exit Uganda.

The store with headquarters in Cape Town, South Africa has also cut prices for bags and underwear by half among other things. Described as ‘manager’s special’ on the posters outside the stores, an employee told Uganda Radio Network – URN that this is a clear-out offer of the stock before the company exits the market later this year.

The general manager Liaan Max Scholtes told the media this week that PEP faced adverse retail conditions and stiff competition in Uganda and will exit the country by December 2020. He said they had been impacted by the Coronavirus (COVID-19) pandemic which dried up demand and has hastened their exit from the market.

The exit of PEP will be a blow to Uganda’s retail sector which had seen unprecedented growth in recent times. It will wipe out almost 90 jobs and leave up to 13 malls, where the retailer has stores, searching for new tenants. The first PEP store in Uganda was opened in 2016. In just one year, the company had opened 14 stores across the country.

The retailer kept shifting addresses for some stores, searching for venues that would attract customers. In 2018, it closed the store at Kubiri after it failed to draw in buyers.

PEP is not the only retailer who has faced the wrath of slow consumption in the country. Tuskys, the Kenyan retailer, quietly closed the Wandegeya branch last month. It only remains with Bwaise and Ntinda branches.

In a statement on Monday, Kenya Competition Authority informed the public that Tuskys was seeking a buyer of the business by July 31, 2020, for the business to survive. In Kampala at Ntinda and Bwaise branches, it is now mostly empty shelves that welcome you.

The group CEO Dan Githau said on Twitter that “The Lord will not allow Tuskys to die” and that they were finding solutions.

Marc Du Toit, the head of retail at the estate agent Knight Frank said Uganda had been favoured by retailers as evidenced by a couple of international brands that have opened here and those lined up to open.

He said, however, since the re-opening from the Coronavirus lockdown, retailers are seeing sluggish pick up in sales. He said most malls are seeing just 40% of foot traffic with a prime time of shoppers at 6 pm  to 8 PM being cut off by curfew worries. He said the poor market for retailers will go on for the next few months.

Jamil Alibhai, the director at Eye Care Centre, players in the optical retail market, said they had noticed a change in consumption as people emerged from the lockdown. People are conscious of what they spend on with people opting for just essentials.

Even when the conditions are bad for retailers, there are those looking to expand their reach. Woolworths, also from South Africa, plans to expand its stores from the current two in Kampala to four, officials said.

The retailer will be re-opening the Naalya outlet when the Metropole Mall refurbishment is complete later this year.

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