Pick n Pay achieves profitability as it looks to open more stores in Zimbabwe

ZIMBABWE – Meikles Limited, Zimbabwe’s hotel, retail and supermarket chain has announced that revenue in supermarkets division, jointly owned with Pick n Pay has increased from US$414 million to US$487.8 million in the year ended March 2018.

According to IOL Business report, Pick n Pay is boasting of profitability in its Zimbabwe operations and is looking to open more stores based on stronger performance from its retail, hotel and agro-processing operations.

“The segment plans to open a number of new stores and there will be further upgrades of existing stores,” said John Moxon, chairman of Meikles Limited.

Pick n Pay, in partnership with Zimbabwe’s Meikles Limited in the TM Pick n Pay Supermarkets deal, operates about 55 stores, some of which co-branded.

While EBITDA earnings in the retail division rose from US$23.8 million to US$34.5 million, liabilities for Pick n Pay TM Supermarkets however increased from US$43.3 million to US$56.1 million, also matching significant value increase in assets from US$76 million to US$85 million.

The two partners revealed plans to expand are backed by the fact that the chain has recorded no debts on its balance sheet, that is, all resources on board will be used to drive the growth strategy.

Competitive landscape

The joint supermarket venture competes with OK Zimbabwe which is also having strong revenue generation and profitability of US$582 million and US$16.6 million respectively during the period to end March.

According to IOL report, the higher revenue generation by Zimbabwe’s big supermarket chains is mainly as a result of the adoption of digital payments in light of cash and forex shortages in the country.

Meikles’ hospitality division which operates resort hotels posted an EBITDA increase from US$1.8 m to US$4.1m attributed to high occupancy levels brought about by the upcoming elections in Zimbabwe.

“Both hotels are benefitting from a growth in occupancy during the first months of the new financial year (to March 2019),” said Moxon.

To position itself at a better competitive edge, Meikles plans to refurbish and upgrade its hotels in the next few months since other operators are also face-lifting their hotels.

African Sun, Meikles rival hotel operator announced this month that revenues for the first five months of the current year increased by 30% to reach US$20.9 million following growing tourist arrivals.

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