ZIMBABWE – Simbisa Brands Limited, Zimbabwe’s leading quick service restaurants operator, has resolved to slash prices of its major products by 20 percent margins in response to the ongoing monetary and fiscal reforms.
The Zimbawe Stock Exchange listed firm operates the Chicken Inn, Pizza Inn, Bakers Inn, Haefelis, Creamy Inn, Steers, Nando’s and Fish Inn brands in the country.
The move follows the recent announcement by the government barring the use of US dollar and other foreign currencies as legal tender among other monetary and fiscal consolidation measures being implemented by Government to stabilise the economy.
Through Statutory Instrument (SI) 142 of 2019, the Government abolished the use of the British pound, South African rand, Botswana pula, and any other foreign currencies, as legal tender.
Finance and Economic Development Minister, Professor Mthuli Ncube, recently predicted that prices of goods and services would start falling this month largely underpinned by the reforms introduced under the Transitional Stabilisation Programme (TSP).
The decision will see King Steer burger, which was previously pegged at US$40 is now being sold for US$32 while at Creamy Inn, a large milkshake, which was previously sold at US$22.50, is now pegged at US$18.
At Pizza Inn, the price of a medium classic pizza has been slashed to US$32 from US$40 while a large classic pizza is now selling for US$48 from US$60. A mega classic pizza is now going for US$72 down from US$90.
According to a report by the Herald, more businesses are expected to reduce prices as the local currency regains footing following the scrapping of the multi-currency system.
A reduction in prices means the runaway month-on-month inflation rate, which had become a common characteristic, will now be tamed and consumers will have more disposable incomes and thus increasing aggregate demand.
In addition, the manufacturing sector is also expected to have to increase their competitiveness in terms of production levels to match with local demand.
In recent months, prices of goods and services in the formal market were spiralling upwards largely triggered by the parallel market exchange rates.
This prompted various intervention that saw the Grain Millers Association of Zimbabwe (GMAZ) embarked on a countrywide price monitoring initiative on major commodities across the retail market in the country.
Millers under the organisation said that they will no longer supply retailers engaging in overcharging of basic commodities, which was also intended to tame unwarranted price increases.
Retailers in the country are expected to charge the normal mark-ups that have always been charged on the products while ensuring they do not take advantage of situations like shortages or engaging in speculative behaviour.