ZIMBABWE – Multinational retail chain and franchise Spar says doing business in Zimbabwe is increasingly challenging as the country’s economy deteriorates further, with the group posting a R9,3 million loss in 2014.
Graham O’Connor, the group’s chief executive, said the loss — compared to a R10,3 million profit registered in 2013 — was on the back of a R17,5 million investment into the Zimbabwean operation.
The retailer, holding a 35 percent stake in Spar Harare (Private) Limited, operates as a wholesaler and distributor of consumer goods to Spar supermarkets in eastern Zimbabwe.
“While our African expansion into Botswana, Namibia and Swaziland has been successful, and we continue to make progress in Mozambique and Angola, business in Zimbabwe has been challenging,” said O’Connor in the group’s latest annual report released last week.
“As competition in the retail sector intensifies, we continue to focus on aggressively driving new business opportunities, organic growth, stringent cost control and securing operating and supply chain efficiencies,” he added.
This comes as most Zimbabwean companies, particularly retailers, are finding the going tough, leading to massive liquidations and soaring unemployment.
Recently, Finance minister Patrick Chinamasa said 55 443 workers lost their jobs after the closure of 4 610 companies between 2011 and 2014.
O’Connor, however, noted that Spar, which services independent retailers trading under the Spar, Tops at Spar, Build It and Savemore brands, plans to open 35 new Spar stores in the year ahead and renovate 180 across Africa.
“The group would also open 45 new Tops at Spar stores, which sell liquor,” he said.
The chief executive noted that in the year to September, retail trading conditions were tough as consumers were under pressure and competition increased.
“Spar would have to be more innovative in future in securing greenfield sites, but there were still opportunities, especially in the informal market,” O’Connor said.