Kenya’s supermarkets face a reckoning with the emissions hidden in their aisles
By Alphonce Wafula
Kenya’s retail landscape, valued at 8 per cent of GDP and employing over 238,000 people, faces mounting pressure to address its carbon footprint. Whilst major chains such as Naivas, Carrefour, and QuickMart have expanded aggressively across Nairobi and secondary cities, their rapid growth has brought indirect emissions under scrutiny.
Scope 3 emissions (those generated throughout the value chain but outside a retailer’s direct operational control) account for between 90 and 98 per cent of total greenhouse gas output in the retail sector. For Kenya, where agriculture contributes 64 per cent of national emissions and transportation another 13.5 per cent, the retail industry’s supply chain footprint extends far beyond shopfloor operations.
Retailers no longer view emissions reduction as purely a compliance exercise. According to logistics providers operating in Kenya, corporate clients increasingly demand carbon reporting that meets Global Logistics Emissions Council and Greenhouse Gas Protocol standards. The business case centres on supply chain resilience, investor expectations, and operational efficiency, not sentiment.
Supplier manufacturing operations
Manufacturing activities within retail supply chains represent the largest concentration of emissions. For Kenyan retailers sourcing from factories across East Africa and Asia, this category includes energy consumption, raw material processing, and transportation of components.
Leading retailers have begun engaging suppliers on renewable energy adoption and efficiency improvements. International retailers with Kenyan operations, including Carrefour, benefit from parent company sustainability programmes. Yet local chains face a steeper challenge: their suppliers often operate on margins too thin to absorb decarbonisation costs without financial support or long-term purchasing commitments.
According to McKinsey analysis, over the next five to ten years, retailers could see increases of at least 10 to 15 per cent in their annual capital budgets and up to 8 per cent in cost of goods sold in select categories. For Kenyan retailers competing in a market where formal retail penetration remains at 35 per cent and informal traders dominate daily shopping, price sensitivity creates genuine constraints.
Yet opportunities exist. Mary Porter Peschka, regional director for Eastern Africa at the International Finance Corporation, stated at the 2023 Africa Climate Business Forum in Nairobi that Africa needs KES 24.7 trillion (USD 190 billion) annually between now and 2030 to fund climate change mitigation measures. This financing gap affects retailers and their suppliers alike.
Product use phase
Energy consumption during product use contributes substantially to retail emissions profiles. Electrical appliances, electronics, and other energy-dependent goods continue emitting throughout their operational lives.
Retailers can influence this category through product selection (prioritising energy-efficient models, durable construction, and items designed for repair or refurbishment). Yet infrastructure limitations matter. Kenya’s electricity grid, whilst increasingly renewable with investments in geothermal and solar capacity, still faces reliability challenges that affect both product performance and consumer purchasing decisions.
The opportunity lies in education and incentives. Retailers that clearly communicate efficiency ratings and total cost of ownership help customers make informed choices whilst reducing their own Scope 3 footprint. Some Kenyan supermarkets have experimented with trade-in programmes for older appliances, though scale remains limited.
Transportation and distribution
Kenya’s transport sector produced 11.1 million tonnes of greenhouse gas emissions in 2021. For retailers, distribution emissions stem from supplier shipments, inter-warehouse transfers, and last-mile delivery.
Logistics providers operating in Kenya, including Roste Global Logistics and DHL, now offer carbon reporting tools and sustainable alternatives. DHL’s GoGreen Plus programme uses Sustainable Aviation Fuel that can reduce emissions by up to 80 per cent compared to conventional jet fuel. For ocean freight, major carriers have committed to zero-carbon fuels by 2040, though cost implications remain under negotiation.
Kenyan retailers face unique distribution challenges. Infrastructure constraints, particularly outside Nairobi, Mombasa, and Kisumu, increase fuel consumption per tonne-kilometre. Secondary cities such as Nakuru, Eldoret, and Kisii (where chains including Naivas and QuickMart have expanded) require careful route optimisation to minimise emissions whilst meeting delivery schedules.
Just-in-time inventory management offers dual benefits: reduced warehousing energy and lower obsolescence. However, this approach demands reliable supplier relationships and transport infrastructure, both of which can prove inconsistent in East African markets.
Packaging materials
Packaging decisions directly affect both upstream production emissions and downstream waste disposal. Across Africa, plastic production has surged from 15 million tonnes to over 350 million tonnes in the past 50 years, with most ending in landfills and dumpsites.
Kenyan retailers must navigate tradeoffs amongst cost, functionality, recyclability, and emissions intensity. International precedent suggests consumers will pay premiums for sustainable packaging. A 2023 survey found over 80 per cent of North American, South American, and European respondents willing to accept higher prices. Whether Kenyan consumers, facing different income constraints, share this willingness remains untested at scale.
Extended Producer Responsibility legislation, already enacted in Europe and parts of North America, places lifecycle accountability on manufacturers and retailers. Whilst Kenya has implemented some waste management regulations, enforcement mechanisms lag behind policy ambitions. The amended Extended Producer Responsibility regulations in South Africa, effective since 2020, have begun showing results, with the country achieving a 54 per cent packaging recovery rate in 2021 (substantially above the 4 per cent African continental average).
Innovation exists within the region. The Ellen MacArthur Foundation’s work on circular economy models in Africa highlights examples such as Sokowatch’s reusable crate system and Nestlé’s elimination of tear-off plastic seals in Egypt, which saved 240 tonnes annually. South African retailer SPAR has reduced its packaging carbon footprint by 40 per cent through material substitution and design changes.
The Ellen MacArthur Foundation’s research indicates that converting 20 per cent of plastic packaging into reuse models represents a USD 10 billion business opportunity globally. The organisation states that reuse models, when properly implemented, benefit customers whilst eliminating plastic waste and pollution.
End-of-life disposal
Landfills, incineration, and unmanaged waste disposal constitute significant emissions sources. Kenya produces approximately 82.3 million tonnes of carbon dioxide equivalent annually, with waste management contributing to the total.
Circular economy programmes (resale, rental, repair) offer retailers pathways to extend product lifecycles whilst building customer loyalty. These initiatives work best when supported by reverse logistics infrastructure and consumer incentive systems. Financial mechanisms matter: store credit for product returns has proven effective in markets with established retail chains.
However, implementation challenges are considerable. Kenya’s waste collection infrastructure remains underdeveloped outside major urban centres. Nairobi’s metropolitan area, along with other cities, faces limited landfill capacity (a situation mirrored across the continent). Cape Town, Johannesburg, and Tshwane metros, for instance, have less than ten years of useful landfill life remaining.
The informal waste economy presents both opportunity and complexity. An estimated 70 to 80 per cent of municipal solid waste in Africa is technically recyclable, yet collection rates remain low. Partnerships with informal collectors (who already handle substantial volumes) could accelerate material recovery, though formalisation processes require careful attention to livelihoods and working conditions.
According to the Ellen MacArthur Foundation, Africa generated 2.9 million tonnes of e-waste in 2019, translating to 2.5 kilogrammes per capita. Although per capita e-waste generation in Africa is the second lowest globally, over 60 per cent is derived from imports.
What’s next?
Addressing Scope 3 emissions requires coordination across procurement, operations, and executive leadership. Retailers must balance immediate cost pressures against long-term supply chain resilience and regulatory risk.
McKinsey’s analysis suggests that by engaging suppliers in efforts to deploy cost-saving or cost-neutral levers to facilitate adoption of sustainability measures, “deployed at scale, such efforts could potentially help reduce the average retailer’s Scope 3 emissions by around 11 to 15 per cent.” The consultancy further notes that “actions that reduce or do not increase costs in the system could yield a 12 to 17 per cent reduction in the average retailer’s Scope 3 emissions by 2030.”
Several principles emerge from successful interventions globally and within Africa: supplier engagement through long-term partnerships rather than punitive demands; internal governance structures that align sustainability objectives with commercial targets; industry-wide collaboration on infrastructure investments and standard-setting; and transparent reporting that builds stakeholder confidence.
For Kenyan retailers, the question is not whether to address value chain emissions but how quickly and systematically to act. Those treating decarbonisation as a strategic investment rather than compliance burden position themselves advantageously as regulations tighten and stakeholder expectations evolve.
The five hotspots outlined here represent starting points, not exhaustive catalogues. Each retailer’s emissions profile varies based on product mix, sourcing strategy, and operational footprint. What remains constant is the need for data-driven prioritisation and measurable targets.
Kenya’s retail sector contributed approximately KES 990 billion (USD 7.6 billion) to GDP in 2017, growing at 12 per cent annually prior to recent economic headwinds. Protecting this value requires acknowledging that supply chain emissions carry business risk (not merely reputational, but operational and financial). Chains that map their Scope 3 footprint, identify reduction levers, and engage partners across the value chain will navigate the coming decade’s sustainability requirements more successfully than those treating emissions as peripheral concerns.
