The Spar Group left its distribution business in Zimbabwe last week and said it would now focus on cost containment and an increase in its own branded products.

The company said the move was sparked by Zimbabwe’s worsening economic situation.

Spar Zimbabwe said on Friday that it would provide support for 21 Spar stores owned and run by indigenous operators and would also take over about 10 stores it disposed with its partner, Innscor Africa.

“The Spar licence for the whole of Zimbabwe was transferred to a newly formed company called Spar Zimbabwe. At the end of 2015, Innscor sold the six corporate stores they owned to an existing Spar independent retailer, Yellowcob Enterprises,” the group said.

Innscor Africa, which also runs Chicken Inn, Nando’s and Steers fast foods counters, had a partnership with Spar Group of South Africa in the distribution operation Zimbabwe and both have now exited the business.

Spar Zimbabwe said it would re-strategise for growth and stability and would open two new stores in Harare in the next few months.

“We have looked at reducing our cost structure and the second strategy is to focus on the independent retailers wherever they operate and provide them with support services from a technical, specialist and product point of view,” Spar Zimbabwe managing director Terence Yeatman said.

There are as many as 21 independent Spar outlet operators and these will benefit from the support offered by Spar Zimbabwe.

Spar chief executive Graham O’Connor said: “The economy was too tough payment issues, infrastructure issues, so it was better that we exited.”

The group said it would import branded products from South Africa.

“We do import a lot of Spar branded products from South Africa and that offers retailers products where there are better margins and to consumers much better priced products from the cheaper rand,” Yeatman said.

A cash crunch in the country has also meant that companies have backlogs in outbound transactions and this is affecting the flow of stock into retail shops. This has started to push up the prices of goods and commodities in supermarkets.

BUSINESS REPORT