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By Almot Maqolo

HARARE,Zimbabwe.(News of the South)– Simbisa Brands, a leading fast foods group continued to grow market share in Zimbabwe with the opening of 14 new counters between 30 June 2019 and 30 June 2020 to close the year with 221 counters.

The group said there are 17 new store openings in the pipeline for FY2021.
A sustained erosion of consumer spending power in Zimbabwe continues to impact the group in terms of reduced footfall and lower real average spend.

“This was exacerbated by the Covid-19 pandemic which saw Zimbabwe embark on a three-week hard lockdown on the 30th March 2020 which was extended for an additional four weeks thereafter,” said the group in its financial results for the year ended 30 June 2020.

“The introduction of value products and increased promotional and marketing activities have been implemented to sustain top-line growth. Simbisa Zimbabwe now has value promotions for each of the weekdays across all key brands.”

Market uncertainty and inflationary pressures have resulted in challenging trading conditions, the group said, as many local suppliers and service providers have taken a stance of pegging prices to a USD price and using a forward-hedge rate above the market rate.

“Continued negotiation with suppliers and in some cases pre-funding raw materials in order to lock in prices has been put in place in order to achieve better margins. A group strategy to negotiate fixed rentals to switch to a turnover-based model is also being implemented in-country to alleviate margin pressure,” it said.

In the period, customer counts dropped 33.7% year-on-year. Inflationary-driven price increases saw average spend in historical terms increase 757% which equated to 65% in inflation-adjusted terms, compared to prior year.
Total inflation-adjusted revenue rose 8.9% to ZWL$3.57 billion from ZWL$3.28 billion in FY19.

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