Plummeting Tuskys Owes Suppliers Ksh 6.2 Billion
Kevin Namunwa  |  Aug 12, 2020
       

The plunging retail chain, Tuskys Holdings, owes suppliers a total Ksh 6.2 billion.

The supermarket chain revealed the figure saying that it has reached an agreement to pay 40% of the amount over the next two years. The supermarket has been struggling to stay afloat and can only afford to pay up the 40% (Ksh 2.4 Billion) over the given period.

Tuskys is currently being watched by the Competition Authority of Kenya (CAK) after it defaulted on suppliers. Th


The supermarket chain has already closed some of its branches as it reduces operational costs to raise the money needed to pay off suppliers.

“Total trade supplier debt is Sh6.2 billion. As at August 6, 2020, 40 percent of this supplier debt has been rescheduled and the respective suppliers have signed individual agreements to reschedule the debt to periods between eight months and 24 months,” Tuskys wrote to the regulator on August 7, 2020.

However, the supermarket chain has agreed with suppliers to deliver additional merchandise worth Sh1.2 billion, with goods valued at Sh200 million already supplied. The retail chain paid suppliers Ksh 2.7 billion in June after the intervention of CAK.

The regulator has, in recent months, focused on abuse of buyer power in the retail business. The supermarket chain industry in the country has not been stable over the past years with suppliers suffering the most.

Retail chains that had to close operations in the country still owe suppliers billions of money. Nakumatt and Choppies closed all their shops in the country with Shoprite and Tuskys heading towards the same direction.

The fact that CAK is monitoring Tuskys’ operations is expected to give confidence to suppliers, some of whose business with the retailer runs into hundreds of millions of shillings per year.

The regulator started looking into Tuskys’ operations in April after reports emerged that it was not paying its suppliers on time as per their respective contracts. Paying suppliers on time will see the retailer regain operational freedom from the removal of restrictions imposed by the regulator.

Among other things, the regulator.  ordered Tuskys to seek its approval before opening new branches or going into new ventures.