Retailers shrug off Harare order
IOL Business - Feb 10th 2012, 10:23
Spar, Shoprite and Pick n Pay have shrugged off an indigenisation broadside from the Zimbabwean government, which was reported to have issued a directive yesterday that licences for foreign-based chains not be renewed to facilitate localisation of the businesses.
Bloomberg quoted Saviour Kasukuwere, the Minister of Indigenisation, as saying over radio stations of the Zimbabwe Broadcasting Corporation that town and city councillors had been told to withhold the renewal of trading licences.
Mike Prentice, Spar’s group marketing executive, said this would not affect operations as all the 70 outlets in that country were owned by Zimbabwean nationals. “As far as we are concerned that has always been the case. All our outlets are owned by the locals. We only have a small stake in distribution of about 35 percent, which is not in retail. The impact is virtually nothing,” he said.
Tamra Veley, the spokeswoman for Pick n Pay, said the group had approval for the company’s shareholding in TM Supermarkets from the Zimbabwe Investment Authority, Zimbabwe’s Reserve Bank, and Zimbabwe’s National Indigenisation and Economic Empowerment Board.
Pick n Pay also had the approval of the Competition and Tariff Commission of Zimbabwe, as well as the approval of shareholders, she added.
Sarita van Wyk, Shoprite’s spokeswoman, said: “We have only one Shoprite store in Zimbabwe and we do not report on revenue contributions by country. Furthermore, Shoprite is currently in a closed period until the announcement of our mid-year financial results on February 21 and we are not in a position to conduct media interviews on operational issues before that date.”
Nic Stein, an equity analyst at Coronation Fund Managers, said the impact on local retailers would be minimal as Zimbabwean earnings usually contributed only a tiny part towards most major retailers’ profits. He explained that Pick n Pay’s share of profit for TM was about R2.4 million against an overall profit before tax of R1.3 billion in 2011.
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