Pick n Pay flags rising risk in Zimbabwe retail sector

Published: 7 hours ago

Pick n Pay Stores Limited chief executive Sean Summers says the group's Zimbabwe operations are facing intensifying pressure as worsening trading conditions continue to strain the country's formal retail sector.

His remarks come amid growing distress in the industry, highlighted by rival OK Zimbabwe Limited's move to freeze salaries and wages under corporate rescue proceedings initiated in February, a step aimed at stabilising operations and preserving cash flows.

The developments underscore broader challenges confronting Zimbabwe's retail sector, including weak consumer spending, liquidity shortages, rising operating costs and frequent power cuts that force retailers to rely on expensive generator power.

In financial results for the 52 weeks ended 1 March 2026, Pick n Pay reported that it had closed three stores in Zimbabwe, leaving 73 outlets trading through its 49% stake in TM Supermarkets, its joint venture with Meikles Limited.

Summers reflected on the group's long-standing involvement in Zimbabwe's retail market, noting both the opportunities and the growing difficulties.

"In Zimbabwe, where we have our beautiful Pick n Pay, we were there right from the beginning when we made that acquisition of TM in Zimbabwe," he said during an investor presentation.

He added that competitive dynamics in the sector have shifted significantly over time.

"You know, if we think back then, OK was a ‘10 tonne gorilla' in Zimbabwe," Summers said, warning that current conditions show no sector is insulated from economic strain.

He further referenced recent developments at OK Zimbabwe, saying payroll and wages had been suspended, and suggesting the retailer's position in the market was under severe threat.

"So, we mustn't think that there is immunity to all this," he said.

Industry observers, including UK-based property consultancy Knight Frank, have also noted that momentum in Zimbabwe's retail sector is weakening following distress signals from major players.

Over recent years, formal retailers have struggled with exchange-rate volatility, declining purchasing power, competition from the informal sector, and rising utility and logistics costs driven by power shortages.

Pick n Pay's exposure to the market is reflected in its 49% stake in TM Supermarkets, which operates outlets nationwide. The investment is accounted for under the equity method in line with IAS 28.

The company also treats Zimbabwe as a hyperinflationary economy under IAS 29, with TM Supermarkets' results adjusted accordingly in its financial reporting.

Pick n Pay fully impaired its investment in TM Supermarkets in the 2024 financial year, meaning its carrying value has been written down to zero. As a result, ongoing losses are no longer fully recognised in its accounts.

The group reported an unrecognised share of losses of ZAR37 million for the current period, compared to ZAR51 million previously, reflecting continued financial strain in its Zimbabwe operations.

Despite maintaining a presence in the market, the figures highlight sustained pressure on one of the country's most prominent formal retail partnerships.
- newsday

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