Toward the end of June 2023, the Uganda Manufacturers Association organized a dialogue whose purpose was to bridge market information gaps between the producers and distributors and forge ways of promoting the uptake of locally manufactured goods by the local market.
The dialogue was majorly attended by mainly manufacturers, supermarkets owners, UMA staff, representatives from UNBS-Quality Standards Bureau, Uganda Revenue Authority, and the Guest of who was the Minister of state for Industry.
According to Mr. Tindiwensi, who is a trader and chairman of Uganda Supermarkets Owners Association (USOA), Supermarkets entered into Uganda’s economy in the late 80s and early 90s, Theses included supermarkets such as Metros cash and carry, others from South Africa. Over the years Uganda started to register more and more supermarkets including Uchumi, Nakumatt, and Tuskys that came from Uganda’s neighbouring countries. Most of these since left the Ugandan market. The most recent and only operating one being Carrefour.
During the same period of their operation several Uganda businesses also set up supermarkets.
The re-birth of supermarkets in the late 80s and 90s was attributed to the favourable investment climate at the time coupled with the growth of supermarket demand factors such as rising urbanization and increasing middle class and the growing population of employed women. Why? Because women population forms the reservoir for consumers that come to supermarkets found in the urbanized community and middle class and emancipated women.
Whereas the foreign supermarkets have since closed shop or existed the Ugandan market, the Ugandan owned ones are still around. They may be struggling to stay afloat but cannot run away because this is home.
It is these local supermarkets that form the USOA an association that brings together about 60 supermarkets with over 100 store outlets spread across the country but the greatest concentration of its members in the Kampala metropolitan area.
USOA was founded and formerly registered with URSB in 2020 and still embarking on recruitment of as many and more local supermarkets who meet the requirements.
USOA’s mission is to set good quality standards; promote good and positive image of supermarkets in Uganda and generally protect consumers and look out for the overall business interest of its members.
Who are the local Supermarkets Customers?
Most of Uganda’s supermarket customers are mostly younger and more educated consumers. These tend to have medium to high incomes. They own assets such as refrigerators, cars, big houses which facilitate the purchase in large quantities from supermarkets because they can store especially food items.
This profile of consumers in Uganda is not different from any other economy like Uganda’s. Supermarket consumers rank product quality and food quality, safety, variety transparency and customer service as higher than other retail outlets such as shops commonly called ‘dukas’ and open roadside markets.
According to Mr. Tindiwensi, it is strongly believed that this is what will drive BuBu which was a central point of discussion during the dialogue. The focus being that every consumer manufactured in Uganda should be aimed at having a space in the supermarket shelve and having it stay there.
This is where USOA comes into the picture to drive toward attaining the BUBU objective.
Thus, as USOA, the objective to provide forums for engagement, a united voice of advocacy and promote good business relations and interaction and exchange with other business associations.
USOA will also help collect information, process and extend it. They will also manage relations with government promote quality service and professional business practices and capacity building for the members.
Supermarkets fall under the services sector of Uganda’s economy. According to financial report of the year 2022/2023, Supermarkets in Uganda are believed to have heavily contributed to the growth recovery of Uganda’s economy. That is out of the 4.5%, that was achieved supermarkets contributed 2.5% of it.
Supermarkets are major off-takers of agricultural products. They are also big off-takers of industrial products.
Supermarkets are accredited with the acceleration of the Uganda’s industrial development because they link the manufacturers with the consumers. The linkage is very important. Everywhere you go in the world every producer or manufacturer aims to access the supermarket shelve. The consumers without any encouragement or enticement will interact with the manufacturer’s products. They are so transparent that they will display openly with the competing products with their prices and the choice is up customer.
It is believed that if a manufacturer’s product cannot stay on the shelf local supermarket in Uganda, chances are that they will not survive on the shelves elsewhere.
As result they endeavour to support micro small and medium enterprises by getting their products to a wider and more affluent market, by skills sharing, helping them getting their products certified, and more importantly formalise their businesses.
Despite all the efforts the local supermarkets, the manufacturers also had some issues to raise against the supermarkets whom they rely on for business.
They called these the 9 Pain Points;
Long credit sales settlement; the bigger the supermarket the longer the waiting period
Advanced payment of products: No supermarket pays upfront; have to wait until sales are completed
Unreliability and credibility of supermarkets; Some supermarkets tend to close within six months of working with them and are left to suffer losses.
Foreign owned supermarkets never want to buy local products.
Consumer perception about locally manufactured products; Consumers tend to think that locally manufactured products are inferior.
Exploitation of local manufacturers by the supermarkets; they generally want high profits and will always squeeze the selling price up to a level that they are basically left with cents.
Some Supermarket procurement teams solicit for bribes from suppliers.
Delay of products on shelves; Manufacturers are greatly affected by having to make replacements. Which is not the case with supplier from Kenya they will not face the same consequences. The losses are quite massive on the part of the local suppliers. Devise ways of how to support each other. For instance, if there is a local product and an imported one, sell the local product first so that the local manufacturer is not greatly affected.
The complex application procedure in supplying big supermarkets. It is a true situation that some manufacturers have to undergo especially with the huge multinational supermarkets. That before you can get your products on the market, the manufacturer has to go through a very tedious approval process.
Since we are in the same room, agree on what the basic requirements expected out of the local supplier considering that they both operate in the same environment being aware of the different challenges including power, Transportation costs before delivery.
With USOA in place and frequency of dialogues like this, the above issues would be resolved.
Business owners, Supermarket Owners were encouraged to interact and strengthen their business relations and also participate fully to enrich the efforts towards the realization of the BUBU agenda.
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