The History and Business Strategy of Naivas Supermarket

Naivas began in 1990 as a single shop in Rongai, Nakuru, handed over for Ksh 1 million. Three and a half decades later, that shop is the largest supermarket chain in Kenya with 114 stores spread across 38 counties, with a valuation of approximately Ksh 74 billion.

From Rongai to Nairobi

Peter Mukuha Kago was born in 1917 and spent most of his life farming. Before the family had any footprint in retail, he was a farmer at Cherangani in Kitale, together with his eldest son, Newton Kagira. His daughter, Linet Wairimu, was a nurse at Ol Kalou, and the other, Grace Wambui, worked at the National Youth Service. The family was dispersed across the country, none of them in trade, while the business that would eventually bear their legacy was being built in Rongai, Nakuru without them.

Peter had an older brother called Joram Kamau who had left farming before Peter and found his footing in commerce. Back in the 1980s, he landed a job at Nakuru Mattresses, later Nakumatt Supermarket. He would work here for a while before starting his own small discount-style shop in Rongai with the help of the Atul Shah family, the owner of Nakumatt. Joram had cultivated a close relationship with the founder of Nakumatt that he was supplied with near-expiry goods on generous credit terms, which he then sold cheaply. And he would use his experience with the trade at Nakumatt in his new business, which he named Tusker Mattresses, later Tuskys Supermarket.

Peter had 9 children, among them David Kimani and Simon Gashwe Mukuha. After finishing Form Four in 1984, David says he became a shop attendant at his uncle Joram’s store in Rongai, where he also worked with his brother Simon. There he graduated into a salesman role, buying stock in cash and ferrying goods between Nakuru town and Rongai. He would spend years inside the mechanics of retail, stocking, transport, replenishment, and daily cash trading. 

After years of building the foundation, Joram was ready for Nairobi. When he opened Tuskys’ first Nairobi outlet in 1990, he left one of his Rongai business premises to his two nephews, David and Simon, at a discounted KSh 1 million walk-in, walk-out handover. The two brothers named their shop Gitwe General Stores.

The Breakthrough

In February 2004, the family opened a store in Machakos, 65km southeast of Nairobi, in a town with no formal retailer at all. The store filled with customers immediately, because shoppers there had spent years overpaying informal traders for basic goods. 

They had found there moat.

David stopped trying to beat Nakumatt and Uchumi inside Nairobi's commercial core and started opening stores in towns the established chains had judged too small to serve. Between 2005 and 2009, the family opened ten stores, eight of them outside Nairobi. 

In 2006, the company dropped the Naivasha Self Service Stores name for Naivas, and three years later it changed its colors from purple to orange and green under a new promise: "Saves you money." In 2009, the family returned to Nairobi with a store in Donholm, entering the city through its residential estates instead of its central business district.

The Business Model

Naivas now buys from more than 4,500 suppliers, over 80 percent of them Kenyan, and sources fresh produce directly from smallholder farmers, with more than 200 suppliers feeding the fresh produce department alone. That cuts out the middlemen who compressed margins in the company's early years. 

Its Foodmarket format, introduced in 2016, places fresh produce, a bakery, and a butchery ahead of packaged goods. Fresh categories drive footfall, and a customer who enters for bread and tomatoes often leaves with packaged goods picked up on the same visit. Its Express format, launched in 2019 sits at petrol stations and transit corridors to catch the convenience purchases a large store would miss.

The NaivasCard loyalty program had 3.5 million registered members by 2024, giving the buying team a record of who buys what, where, and how often. They also launched a Visa co-branded version which added instalment payments and contactless transactions to remove further friction. 

Private-label staples, sugar, rice, tea, tissue, and flour, sell at two to three percent below competing brands and carry no advertising cost built into the price, widening the margin on the products customers track most closely. Naivas now holds 53 percent of Kenya's formal supermarket market share, and each of its 114 stores earns about Ksh 1 billion a year on average.

Scaling Through the Collapse

Between 2017 and 2021, Nakumatt, Tuskys, and Uchumi collapsed in succession under supplier debt and family governance disputes, freeing up roughly 150 retail locations across the country. Naivas, carrying no bank debt, took six former Nakumatt stores for about Ksh 400 million and became the anchor tenant in malls whose landlords urgently needed a solvent retailer. By 2019, the chain had grown to 53 stores.

In April 2020, the family sold a 31.5 percent stake in its Mauritius-based holding company to a consortium led by Amethis Finance, alongside the International Finance Corporation, DEG, and MCB Equity Fund, for Ksh 6 billion. The money funded a middle-management layer, an IT upgrade, and a formal governance structure the family had put off for thirty years. 

The store count rose from more than 60 to 84 between 2020 and 2022. In August 2022, the Mauritius conglomerate IBL Group led a new consortium that bought out Amethis for $119.68 million, equivalent to Ksh 15.5 billion, and bought an additional 8.5 percent directly from the family for $32.29 million, equivalent to Ksh 4.2 billion.

 In June 2023, the family sold a further 11 percent stake for an estimated $41.7 million, equivalent to Ksh 5.4 billion, dropping its ownership to 49 percent and giving IBL's investment vehicle, Mambo Retail, a controlling 51 percent. That run of deals valued Naivas at roughly Ksh 20 billion in 2020 and at Ksh 53.5 billion by 2023.

Competition and Existential Threats

Quickmart, founded by John Kinuthia and backed by Mauritius-based Adenia Partners from 2018, has over 60 stores. Carrefour, run under the Dubai-based Majid Al Futtaim franchise, opened its first Kenyan store in Karen in 2016 and has grown to 34 stores. Willy Kimani, Naivas's former Chief Commercial Officer, left the company and opened Jaza, a hard-discount chain in Nairobi's eastern estates, starting with a Buru Buru store in December 2023 and has now over 25 stores.

The deepest threat has come from inside the family. The eldest son, Newton Kagira filed a court application in 2013 to block a proposed Ksh 3 billion sale to South Africa's Massmart, claiming a stake based on an early capital contribution. The court rejected the claim, but Massmart withdrew from Kenya anyway rather than enter a market with an unresolved family dispute attached to its target. 

Newton returned to court after the sale of shares to Amethis, and the Court of Appeal froze further share transfers in November 2021. The freeze did not stop the IBL transactions in 2022 and 2023, which Naivas argued took place at the Mauritius holding company level, outside the order's reach. In March 2025, the Court of Appeal revived Newton's appeal, and by March 2026 the High Court had suspended the ownership dispute entirely, pending two related appeals over Peter's estate filed in 2016 and 2017.

In May 2025, a Nairobi County Assembly committee accused a Naivas branch on Moi Avenue of selling expired yoghurt and announced a citywide closure order that the county executive overturned within the same day. Civil unrest has cost the company directly: the 2024 protests generated a Ksh 170 million insurance claim, and the June 2025 protests, which hit branches in Nyeri, Naivasha, and Nairobi's Mountain Mall, generated a further Ksh 134 million claim, paid out in February 2026. Combined with rising competition from Quickmart and Carrefour, these pressures contributed to a 19.6 percent fall in net profit for the year ending 2024, from Ksh 2.3 billion to Ksh 1.9 billion, as expenses rose 4.2 percent to Ksh 90.2 billion.

Peter Mukuha died in May 2010, having written his wishes by hand in a 2006 diary and distributed his 20 percent stake six weeks before his death. David stepped down as chief executive in October 2024, handing the role to Andreas von Paleske, a former private equity executive who had helped structure private equity deals. The Mukuha family now holds 49 percent in Naivas.

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