TM boosts Pick n Pay earnings

HARARE - Zimbabwe's leading retailer TM Supermarkets' strong performance in the six months to August saw its South African partner Pick n Pay earning close to $27 million in profits.

Pick n Pay chief executive Richard Brasher yesterday attributed the growth in profits to further efficiency gains and cost savings across the group’s procurement and supply chain channel.

“Growth in like-for-like trading expenses was restricted to 3,8 percent, against Consumer Price Index for the period of 6,1 percent, notwithstanding high regulatory increases in electricity, rates and other utilities,” he said.
In the period under review, TM Supermarkets’ profits went up 53,7 percent buoyed by increased sales due to various promotions.

TM Supermarkets now has 58 stores in Zimbabwe, 15 of which trade under the Pick n Pay banner.
The latest development comes as a surprise to Zimbabwe’s struggling economy which is battling declining and wilting consumer purchasing power owing to companies scaling down operations and cutting salaries for employees.

Retail operators have also been forced to lower their profit margins and are required to pick half their stock from local suppliers.
Meanwhile, Brasher said the South African retail giant refurbished 35 stores in the 26 weeks, including 19 Pick n Pay and Boxer supermarkets and six local stores.

“This is almost triple the number of stores refurbished in the prior period. The group completed the refurbishment of its Boksburg Hypermarket during the year, and is encouraged by its subsequent strong turnover growth,” he said.
Pick n Pay Online turnover rose 33,7 percent year-on-year, with particularly strong growth in the Western Cape which benefits from a dedicated online warehouse, at the Brackenfell Hypermarket.

The supermarket chain hopes to replicate this in Johannesburg by developing an online warehouse in Isando.
Much of the group’s expansion appears to be through smaller, franchised owned stores.

It opened nine Pick n Pay Local stores and 23 Express stores during the reporting period.
“Our first spaza-to-store pilot project in Soweto has been well received in the community and is trading successfully.

“The group is developing four more sites in Gauteng, all of which will open by the end of the year,” Brasher said.
The group opened seven new supermarkets outside South Africa during the period, three in Namibia, three in Zambia and one in Zimbabwe.

“The weaker performance of the rest of Africa division reflects the difficult trading environment in Zambia. However, the group remains confident of the long-term prospects of the region and it plans to open three new stores in Zambia in the remainder of the year,” Brasher said.

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