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Harare – The Spar brand will still be available in Zimbabwe, despite South Africa’s Spar Group's [JSE:SPP] move to stop its distribution business in the country as the licence for the brand has now been transferred to a new entity, Spar Zimbabwe.
Spar Group chief executive Graham O’Connor said this week that the company has stopped its distribution operations in the country, where it had a partnership with Innscor Africa in Spar branded outlets.
O’Connor cited difficult economic conditions as well as infrastructure issues for the company’s move. The Zimbabwean retail industry is dominated by TM Supermarkets – which has a partnership with Pick n Pay – and OK Zimbabwe, the largest retail operator in Zimbabwe.
“Since the introduction of Pick n Pay into Zimbabwe it has been difficult for independent retailers to play up against the bigger operators. With the support of Spar Zimbabwe, independent retailers remain competitive,” said Terrence Yeatman, managing director of Spar Zimbabwe.
Spar Zimbabwe will run about 10 stores transferred from Spar Group while it will support 21 other outlets owned and run by independent local operators under the Spar franchise.
Since the announcement by Spar Group that earlier this week that it had stopped its distribution business, Spar Zimbabwe has been at the centre of social media gibes that all Spar outlets would be closed.
“At the end of 2015, Innscor sold the 6 corporate Spar stores they owned (in Zimbabwe) to an existing Spar independent retailer, Yellowcob Enterprises. Concurrently, the Spar licence for the whole of Zimbabwe was transferred to a newly formed company called Spar Zimbabwe,” added Yeatman.
He highlighted that “independent Spar retailers work together with Spar Zimbabwe to remain competitive” in the Zimbabwean retail sector.
Retailers in Zimbabwe are under pressure from the government to pick half of their stock from local suppliers while import restrictions have also started to affect stock levels, according to industry players.
Margins in the retail and wholesale sector in Zimbabwe have also taken a knock, with Denford Mutashu, president of the Confederation of Zimbabwe Industries, saying the lower margins are not reflective of rising operating costs.
A thriving informal sector has also eaten into revenue generation capacity for the larger retailers, with informal traders smuggling goods for resale into Zimbabwe, usually in front of shops.
Power outages and constrained water supplies in recent months have also added to the woes retailers, wholesalers and other businesses are facing in Zimbabwe.
