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Pick n Pay enjoys a growing footprint in Zimbabwe

Pick n Pay is gaining traction in Zimbabwe, where it jointly owns the TM Supermarkets chain together with Meikles.

On Friday it said that turnover for the year to March had surged 8 percent to $360 million (R4.42 billion) on the back of raised branch sales.

The South African grocer has embarked on an ambitious expansion programme away from its home market. In April this year it said it would invest more than R5bn in expanding its rest of Africa operations, such as those in Zimbabwe.

The Zimbabwean investment into TM Supermarkets is starting to gain traction, with its Zimbabwean partner, Meikles saying on Friday that more shops would be opened and several others upgraded to better stand competition.

This would help Pick n Pay gain more customers in a Zimbabwean economy where retailers face great competition from a booming informal sector. Economists saying refurbishments and facelifts to stores help retailers attract shoppers while also creating more space for stock.

With Zimbabwe’s industry and manufacturing struggling as a lowly capacity utilisation of below 40 percent, retailers have had to resort to imports from South Africa despite growing pressure from the government for them to pick about half of the stock from local producers.

“Investment in replacement and expansion projects has been viewed favourably by the consumers, reflected in individual branch sales growth ranging between 25 percent to more than 100 percent,” said John Moxon, the chairman of Meikles.

He said turnover in the TM Supermarkets division during the year to March had risen from $334m in 2014 to $360m this year. He said the nearly 8 percent increase in turnover had been attained “despite a negative rate of inflation in supermarket related trading” during the same period.

The strong turnover position had seen gross profit increase by 8.5 percent to $64m, indicating a rise in market share for the company. Rival operator, OK Zimbabwe, said in May that revenues for the same period had declined by 4.3 percent to $462.7m, while after tax profits for the same period had declined from $9.7m to $7.5m.

Meikles, which has since diversified into mining and also operates city and resort hotels in addition to agro-processing, said it was discussing opportunities in the retail and agricultural sectors in the Democratic Republic of Congo.

The company said it had received a significant portion of the original amount it was owed by the Reserve Bank of Zimbabwe. Moxon, however, did not disclose how much had been received.




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