Supermarket chain Naivas Limited made a profit of Sh2.1 billion in the nine months ended March, marking a higher earnings growth from a year earlier.

The performance of the private company has been disclosed by Mauritian conglomerate IBL Group which acquired a 26.3 percent stake in the retailer in August last year as part of a consortium that owns a combined 40 percent equity.

“Naivas, the leading supermarket chain in Kenya that the group (IBL) invested in during the first quarter, generated higher profits compared to last year,” the multinational said in a trading update.

“The share of profits for Naivas, as an associate, is being reported for the first time this year and represents 184 million Mauritian Rupees (Sh553.4 million at current exchange rates).”

The Sh553.4 million profit allocated to IBL indicates that Naivas’ total earnings stood at Sh2.1 billion in the nine-month period.

The supermarket operator, which has grown to dominate the formal retail sector, has been consistently profitable over the years.

This has attracted major investors who have paid a significant premium to enter its shareholder list.

Previous disclosures showed that the retailer reported sales of Sh65.1 billion in the year ended June 2021 when its net profit stood at Sh2 billion, representing a net margin of 3.18 percent.

This was an improvement from the prior year when it made a net income of Sh1 billion on sales of Sh54 billion, amounting to a net margin of Sh1.9 percent.

The family of Peter Mukuha Kago –the founders of Naivas— in August last year pocketed $32.29 million (Sh4.4 billion) from the sale of an 8.5 percent stake to the IBL consortium in a transaction that valued the retailer at Sh45.6 billion.

The family joined the International Finance Corporation (IFC), German fund DEG and private equity firms Amethis and MCB Equity Fund to sell a combined 40 percent stake in the country’s biggest supermarket for a record-setting $151.97 million (Sh20.9 billion).

The other parties in the IBL-led consortium are Proparco and DEG which reinvested into the supermarket chain.

Established in 1990, Naivas has grown to become the largest supermarket chain in the country with more than 84 stores and employing 8,000 people as of June 2022.

Its growth came amid stumbles by its rivals such as Nakumatt Holdings, Uchumi Supermarkets and Tuskys which went bankrupt due to large debt or mismanagement.

The financial performance of other significant retailers –Carrefour and Quickmart— is not publicly available.

Naivas has continued to expand, opening a total of seven new stores last year alone and raising its branch count to 91 as of December 2022.

The branches it opened last year include Elgon View Mall in Eldoret, Naivas Nairobi West, Naivas Express Uthiru and Greenwood Mall in Meru. Supermarkets are expanding into busy locations including middle-class residential neighbourhoods.