Advertise with

Pick n Pay stores in Zimbabwe have raised revenue from $414 million in 2017 to $487 million this year.
Pick n Pay stores in Zimbabwe have raised revenue from $414 million in 2017 to $487 million this year.

Pick n Pay rides Zimbabwe retail and economic woes


By Memory Mataranyika - Sep 28th 2018, 15:31

Despite rising inflation in Zimbabwe and liquidity challenges that are posing serious challenges to stock procurement, Pick n Pay stores in Zimbabwe have raised revenue from $414 million in 2017 to $487 million this year. 

Pick n Pay trades from 55 stores in Zimbabwe and has lined up a program to open more outlets this year. Ebitda earnings rose by 45% to $34.5 million in an economy that is expected to post low growth of around 1% this year.

The Zimbabwean partner of Pick n Pay, Meikles, delayed financials for the full year to March 2018 as it suffered uncertainties from government delays to repay funds owed to the company.

This will be in addition to upgrading and modernization of existing ones, some which already carry the brand of the SA grocer, said John Moxon, chairman of Meikles, the Zimbabwean partner of Pick n Pay in the supermarkets chain.

“In the forthcoming financial year, the segment plans to open a number of new stores and there will be further upgrades of existing stores,” he said.

Meikles is anticipating “consistent growth” in the supermarkets division in the forthcoming year.

The TM Supermarkets and Pick n Pay partnership has previously faced pressure from the government to pick stock from local suppliers while a lobby group, Buy Zimbabwe has also been campaigning for retailers to pick stock locally although most local manufacturers are struggling for capacity.

The tills have been chiming for Zimbabwean retailers, which include bigger rival, OK Zimbabwe as consumers are forced to procure from formal stores which accept digital payments alternatives owing to cash shortages.

“Digital payments have somewhat helped ease payments transactions otherwise the retail market would have collapsed."

“But even so, there are still challenges with accessing forex for imports and supermarkets have to turn to the parallel market where rates are ever rising and retailers have no option but to pass on the costs to consumers through price increases,” said Denford Mutashu, president of the Confederation of Zimbabwe Retailers.

However, the retailers are facing challenges in sourcing for stock while inflation has also been on the rampage, leading to shortages of some foodstuffs. Inflation in Zimbabwe gained 0.54 percentage points to 4.83% in August, the highest rate in over five years, according to data from Zimstats.

The Zimbabwean retailers have to source foreign currency for imported supplies from the parallel market where rates for forex have spiked 110% versus local currency in the form of electronic fund transfers.

The Pick n Pay chain in Zimbabwe did not have any borrowings and is adequately resourced to “implement further growth” in the country. However, its Zimbabwean joint holding company is now under litigation for loan defaults amounting to $5 million, mainly from government-related financial institutions.


Related News

H&M’s sales growth fails to ease investors concerns about margin pressure
18/06/2019 - 15:41
Fashion retailer H&M reported sales grew for a fourth straight quarter, but also hinted it had needed to invest more to boost its online business, disappointing investors already concerned about margin pressure.

Fashion house Chanel parades its independence as profits rise
18/06/2019 - 12:49
Luxury fashion group Chanel, whose star designer Karl Lagerfeld died in February, reported higher annual sales and profits and once again reaffirmed its independence, stating it was not for sale.

A Woolworths window display wins big in London
18/06/2019 - 11:34
A Woolworths window display that incorporated milk bottles and plastic hangers has snapped up a prestigious global award.

Five things you need to know about the pharmaceutical industry
14/06/2019 - 11:10
The pharmaceutical sector - both locally and globally - is following suite with general retail and going through uncertain times. More consumers are shopping the basics with baskets of necessities only. As CEO of the Shoprite Group, Pieter Engelbrecht, said in response to their interim results (which speak for the average South African), “In the external operating environment, economic conditions have left the group's core customer under significant financial pressure.”

Zimbabwe's farmers smell the tea and coffee
14/06/2019 - 09:50
Farmers in Zimbabwe’s Eastern Highlands are smelling the tea and coffee.