Pick n Pay warns Zimbabwe retail squeeze as TM closes three stores

Pick n Pay warns Zimbabwe retail squeeze as TM closes three stores

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Pick n Pay Stores Limited chief executive Mr Sean Summers says the group’s Zimbabwe operations face the same hard trading environment affecting the wider formal retail sector, as weak consumer spending, liquidity constraints and rising operating costs continue to bite.

His remarks come as OK Zimbabwe Limited, a major listed retailer, has moved to freeze salaries and wages under corporate rescue proceedings initiated in February. OK management has said the step was meant to stabilise operations, preserve cash flows and restore profitability.

In a presentation to investors on Pick n Pay’s financial results for the 52 weeks ended March 1, 2026, Summers said the group could not assume it was protected from the pressures shaking the sector.

“So, we mustn’t think that there is immunity to all this,” Summers said, referencing the challenges being experienced by competitors. He also described OK as having been a dominant player in Zimbabwe’s retail market in earlier years.

The latest Pick n Pay results show three store closures in Zimbabwe during the reporting period. The group operates locally through its 49 percent stake in TM Supermarkets, a joint venture with Meikles Limited, with 73 outlets remaining after the closures.

Zimbabwe’s formal retail market has faced sustained headwinds over the past three years, including exchange-rate volatility, declining household purchasing power, intensifying competition from the informal sector, and high operating costs. Retailers have also cited frequent power cuts, which increase generator use and associated fuel and maintenance expenses.

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Pick n Pay said its 49 percent investment in TM Supermarkets (Pvt) Limited is accounted for using the equity method in line with IAS 28 (Investments in Associates and Joint Ventures). The group also noted that Zimbabwe is treated as a hyperinflationary economy under IAS 29 (Financial Reporting in Hyperinflationary Economies), meaning TM’s results are reported on that basis.

The investment in TM Supermarkets was fully impaired to nil in Pick n Pay’s 2024 financial year. For the current period, the group reported unrecognised share of losses of ZAR37 million (2025: ZAR51 million), reflecting continued pressure on the Zimbabwe business.

Although Pick n Pay still holds the 49 percent stake, the write-down means the investment is carried at zero in its accounts, and its share of ongoing losses is no longer fully recognised. Pick n Pay said that had the investment retained value, losses for the period would have amounted to US$2,26 million (ZAR37 million), down from US$2,28 million (ZAR51 million) previously.

For communities and consumers in Mashonaland Central, the performance of formal supermarkets remains closely tied to job security, supplier relationships and the availability of basic goods—particularly as retailers navigate cash shortages, high costs and shifting consumer demand.

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