Retail Trade Sector Regulations and Code of Practice - Retail Trade Association of Kenya (RETRAK)

In 2016, the Kenya Association of Manufacturers (KAM) in collaboration with the Ministry of Industry Trade and Cooperatives (MITC) conducted research to develop an appropriate regulatory mechanism to address unfair trade practices in the retail trade in Kenya.

At the time, MITC had formed a formed a National Sector Working Group (NSWG) to address the complaints of delayed payments for goods supplied to major supermarkets in the country. The NSWG brought together various stakeholders including RETRAK and the Association of Kenya Suppliers (AKS).

The research report was adopted and published by the MITC State Department for Trade report in July 2017. You can view the report here Study on Kenya Retail Sector Prompt Payment.

The key findings of the research included: debts outstanding for 60 days and above amounted to KShs. 334 million as of December 31, 2016, based on data from 22 suppliers; suppliers reported having to seek additional loans to stay afloat, and in some instances they have scaled down operations owing to delayed payments; six supermarkets account for 93% of the total debt outstanding for 60 days and above with Nakumatt, Tuskys and Naivas accounting for 34%, 18% and 14% respectively; manufacturers have continued to supply their products despite delays in payment to maintain their market presence.

The NSWG seeks to implement the recommendations of the MITC report to improve the enabling environment for the retail trade sector through the development of:

  • The Retail Trade Sector Prompt Payment regulation; and
  • The Retail Trade Sector Code of Practice (CoP)

RETRAK and KAM and the MITC seek additional sought to develop the proposed regulations and CoP for the retail sector which are measures identified in the National Trade Policy.

Expected Outcome

Development of appropriate regulations for the sector and a Code of Practice should, if implemented, result in: improved SME cash flows reduced financing costs, and reduced solvency issues thereby improving job security in the sector.