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Meikles Limited executive chairman Mr John Moxon said the investment was “wonderful news for stakeholders”, as the US$25 million investment would position “TM Supermarkets as a leader in a very competitive industry.”
The chain has 50 retail outlets countrywide, including two operating under South African giant Pick ‘n’ Pay brand. TM Borrowdale, in Harare, is the chain’s flagship.
Mr Moxon said the significant investment is designed to see TM Supermarkets regain pre-2009 traction as Zimbabwe’s foremost supermarket chain.
“Precise timelines are not yet finalised but we shall renovate existing stores throughout the country to world-class standards and open new ones starting in Harare.”
Mr Moxon said the substantial increase in TM Supermarkets profitability was due to a number of underlying factors, including fine-tuning management and better stock control, merchandising and buying strategies.
“The US$25 million 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,” Mr Moxon said.
“Pre-tax profits of TM Supermarkets for the 11-month period to the end of February 2013 have exceeded those of the previous year by in excess of six-fold,” he said.
He added that the company had been “greatly encouraged” by the performance of the two Pick ‘n Pay stores opened in Harare in 2012 (Kamfinsa and Westgate) and the TM branded store in Chinhoyi which was extensively refurbished and “these programmes will be accelerated in 2013”.
Following the completion of all the regulatory approvals in Zimbabwe and South Africa, Pick ‘n’ Pay increased its shareholding in TM Supermarkets from 25 percent to 49 percent.
The US$13 million for the additional shareholding was received from Pick ‘n’ Pay and shares were issued effective February 1, 2012.
The funds were meant for the refurbishment of the supermarkets.
TM is one of the country’s leading retail chains and while it still retains a significant share of the market, capital constraints had limited its capacity to compete due to constrained capacity to stock and replace old equipment.
The situation had been made even more difficult with the entry of several other small players chasing the elusive US dollar in 2009.
Zimbabwe’s retail market is still afflicted by low demand due to low salaries as the economy recovers.
Another of South Africa’s retail giants, Shoprite, last year expressed interest in entering the Zimbabwe market before developing cold feet at the 11th
hour. US retailer Wal-Mart also flirted with plans to enter Zimbabwe.
Online Reporter