TM Supermarkets to upgrade its stores in Zimbabwe

ZIMBABWE’S TM Supermarkets, in which Pick n Pay is a partner, has invested a further $25m into the retail chain, with the money aimed at transforming its retail outlets through refurbishment of the group’s 50 stores in that country.

Two of TM Supermarkets’ outlets have already been re-branded into Pick n Pay stores following the South African retailer’s investment in the Zimbabwean supermarket chain operator. Pick n Pay controls about 49% of TM Supermarkets while Zimbabwe Stock Exchange-listed Meikles Africa owns the remaining 51%.

Analysts said yesterday the refurbishment exercise, would enhance the group’s bid to modernise its stores in a sector that already had stiff competition.

TM Supermarkets is likely to capitalise on its expansive network of branches although rival operator, OK Zimbabwe, and other smaller retailers are expected to put up a fight to defend and grow their market share.

“TM Supermarkets is now in a position where it can secure investment capital and this is key in a Zimbabwean context where most businesses battle to raise capital.

“A strong capital base will enable TM Supermarkets to expand and modernise its stores and attract more shoppers,” said independent economic analyst Moses Moyo.

Meikles chairman John Moxon said that the investment would “reposition TM as a leader in a very competitive industry”.

“The $25m investment, together with a substantial internal generation of cash from increased earnings, will soon be available for the renovation of existing supermarkets and the addition of new opportunities,” he said.

In November last year, Mr Moxon said “forward planning” suggested the retail operations would “require further funding” to “accelerate” the refurbishment exercise and to open “new supermarkets”. There are plans to open new stores across the country although Mr Moxon would not provide precise timelines.

During the 11 month period to the end of February, pre-tax profits in TM Supermarkets “exceeded those of the previous year by in excess of six-fold”, while the company has also been buoyed by “the performance of the two Pick n Pay stores” opened in Harare last year.

In the half-year period to the end of September last year, Meikles, which also runs departmental stores and city and resort hotels, said profits before taxation amounted to $1.02m compared to a loss of $7.04m incurred in the previous corresponding period.

As a result, after tax profits jumped to $767,000 against the prior year period’s loss of $5m.