FAST foods giant, Simbisa Brands Limited, says it is expanding its business outside Zimbabwe to offset local economic challenges which have knocked sales volumes.
The company’s Chief Executive, Basil Dionisio, said high and escalating inflation and foreign currency shortages in Zimbabwe, are putting pressure on Gross Profit and Operating Margins.
“Customer counts dropped five percent year-on-year as a result of the aforementioned pressure on consumers, which has dampened consumer spend across the entire Zimbabwe consumer sector,” Dionisio said in a statement appending the group’s financials for the year to June 2019.
The Simbisa boss said inflationary-driven price increases saw Average Spend increase 89 percent compared to the previous year.
Despite the harsh operating environment, the fast-food chain continued to grow its market share in Zimbabwe, opening 17 new outlets between 30 June 2018 and 30 June 2019, to close the year with 209 outlets, up from 192.
Capital expenditure of ZWL$18,4 million was outlaid during the period under review for expansion and maintenance of existing outlets to a best-in-class standard.
On the regional front, average spend in USD-terms for Simbisa products remained firm, despite currency devaluation experienced in Ghana and Zambia where the respective local currencies dropped 13 percent and 29 percent against the green back during the financial year under review.
Growth in regional business has been led by Kenya, where the fast food giant opened 18 new outlets between 30 June 2018 and 30 June 2019, including the new Grill Shack brand which is performing above expectations.
“The focus in our other regional markets has been to streamline the business, defend our market position and ensure existing operations generate positive returns on investment,” said Dionisio.
Meanwhile, Simbisa’s profit before tax surged 148 percent to ZWL$49,8 million.