Pick n Pay’s Zimbabwean partner bullish about prospects
IOL Business - Dec 3rd, 09:35
Harare - John Moxon, the chairman of Zimbabwe’s Meikles Africa, which runs TM Supermarkets jointly with South African grocer Pick n Pay, is bullish about future prospects in the country’s retail industry, saying the company has adopted a robust expansion plan to capitalise on the expected shift for the better in consumer spending patterns.
This is despite a marked economic slowdown that has resulted in some companies laying off workers and scaling down operations.
Zimbabwean supermarket operators have had to resort to mostly imports of basic goods and commodities despite government pressure for them to buy 50 percent of their stock from poorly capacitated local producers.
Pick n Pay has a 49 percent interest in TM Supermarkets, which competes with Zimbabwe Stock Exchange (ZSE)-listed OK Zimbabwe. The South African retailer has two branded outlets in Zimbabwe, while Moxon said five more TM Supermarkets outlets were being refurbished in the next few months.
“We have five supermarkets to be renovated in the next few months. So we are very robust in our expansion.”
A TM Supermarkets shop was set to open this week.
He said the first three months of the company’s financial year, which started in April, “were fine”.
However, the operating environment for the Zimbabwean retail industry had become “more difficult” in the aftermath of the July elections, which President Robert Mugabe’s Zanu-PF party won.
“You have read about the cash shortages and the economy is definitely not very robust at the moment. Like everyone, [we have been affected by business conditions] but we expect that to change,” Moxon added.
Analysts said the retail industry in Zimbabwe required significant capitalisation for modernisation and refurbishment programmes. Such programmes would enable supermarket operators to attract more shoppers.
“There is a tough fight for the disposable incomes of Zimbabwean consumers and there is a careful spending pattern that is emerging.
“The modern-looking supermarket offering better products and cheaper prices will win more shoppers and that is why we are seeing supermarket operators such as TM, Pick n Pay and OK Zimbabwe revamping their outlets,” independent economist Moses Moyo said.
Last week shareholders in Meikles ratified a 10 percent shares disposal deal to the company’s employee share ownership trust as part of efforts to comply with Zimbabwe’s indigenisation policy.
However, the company’s bid to provide vendor financing for its staff to buy shares will only materialise if the company is paid back funds held on deposit with the central bank.
“We do rely on receiving funds from the Reserve Bank, our deposit with the reserve bank. The government, we told, is currently working on a repayment plan,” the Meikles chairman said.
Moxon, whose ZSE-listed Meikles Africa also has hotel and department store business units, added that the company had found local partners for its mining venture although he would not give the names following a failed bid to buy into Freda Rebecca, the biggest-producing gold mine in Zimbabwe.
Meikles has other diversified interests in agro-processing, hotels and department stores while it has also recently forayed into mining with a foreign partner, Centar Mining. © Independent On-line 2013. All rights reserved.
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