THE ROLE OF ANCHOR TENANT IN DRIVING TRAFFIC IN A SHOPPING MALL: THE CASE OF NAKUMATT EXIT FROM THREE SHOPPING MALLS IN NAIROBI

Abstract

The current study investigates the role of an anchor tenant in driving traffic in a shopping mall. As the main tenant in a shopping mall, anchor tenants are expected to attract both human and vehicular traffic into a shopping mall. The traffic to the anchor tenant is expected to spill over to the non-anchor tenants and thus benefit them. This expectation is sometimes not met especially when an anchor tenant is posting sub-optimal performance or when they exit the mall. The background of this study was based on the malls in Nairobi who had Nakumatt Supermarkets chain as the anchor tenant. Nakumatt was the largest chain of supermarket with about 64 outlets in East Africa at its highest level at the beginning of 2017. However, due to a myriad of management challenges, the chain was forced to close most of its stores to a low of about 5 operational stores in mid-2018. As a result, and based on the findings, this affected the shopping malls as traffic reduced by almost 50% in some malls. The effects were felt in terms of reduced business activities in the mall, reduced occupancy levels, lower rental rates and general decline of mall financial performance. It is recommended that shopping malls should consider having more than one anchor tenant to mitigate against the effects of sub-optimal performance or exit of the anchor tenant.

 Keywords: Anchor Tenant, shopping mall, shopping centres, Nakumatt, Kenya