Naivas enrolls two million customers into its loyalty program

Naivas Limited, a prominent supermarket chain, has successfully enrolled over two million customers in its loyalty card program, highlighting its substantial pool of loyal clients that has contributed to its position as the leading player in the formal retail market.

The adoption of the loyalty program was revealed in a trading update by Naivas Limited’s major shareholder, IBL Limited of Mauritius.

With a customer base exceeding two million, Naivas boasts one of the most extensive client networks in the country. Safaricom currently holds the highest number of customers, surpassing 30 million.

Kenya Power, Equity Bank Kenya, Kenya Commercial Bank, Co-operative Bank of Kenya, and NCBA Bank Kenya are among the companies with millions of customers. Firms with larger client bases are in a favorable position to enhance their revenue and earnings due to the advantages of economies of scale. This advantage is particularly significant for businesses that operate efficiently and have the ability to optimize the pricing of their products or services.

Naivas stands out as the most profitable player in the supermarket industry, boasting an annual profit exceeding Sh2 billion. Similar to other retailers, Naivas operates a loyalty program aimed at retaining customers and boosting sales. Shoppers earn one point for every Sh100 they spend at any of the retailer’s 100 stores nationwide. These points can be redeemed at a rate of one point for Sh1, allowing customers to use them for future shopping.

In the nine months ending March, Naivas reported a profit of Sh2.1 billion, indicating substantial earnings growth compared to the previous year, as disclosed by IBL earlier. The supermarket chain’s expansion efforts continue, with the recent opening of its 100th store in Lavington along King’ara Road. Further expansion plans include the launch of two more stores—one on Mwanzi Road in the capital city and the 102nd unit in Kakamega town—by the year’s end.

Competing closely with Naivas are Quickmart and Carrefour, both striving to expand their presence and customer base. Quickmart currently operates 59 stores, making it the second-largest retailer in Kenya, while Carrefour, having entered the market seven years ago, manages 20 outlets. These companies are vying to capture the market left behind by the collapse of major supermarket chains like Tuskys, Nakumatt, and Uchumi, primarily due to substantial debts and mismanagement. Additionally, new entrants like Massmart and Shoprite from South Africa withdrew their operations in Kenya after facing challenges in the fiercely competitive formal retail market.

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