Retail news. Semester 1 of 2014 table of contents

Innscor faces stiff competition

October 26, 2012 in Business

INNSCOR Africa Limited (Innscor)’s fast food division is facing potentially stiff competition from global brands such as the United States of America’s KFC, with information indicating the two have taken up space for drive-in outlets at Ken Sharpe’s proposed US$100 million Mall of Zimbabwe to be constructed in the plush Borrowdale area.

Report by Taurai Mangudhla

In an interview, the manager of West Properties — owners of the property — Mike van Blerk told businessdigest the two will join major brands like Pick‘n’ Pay at the new mall, now expected to be completed by October 2014.

This comes as market information has linked KFC to a partnership with a local company, where it will open outlets at strategic points across the country.

In the past two years, the local fast food industry has seen the emergence of new outlets in major towns, prominent ones being Tawanda Mutyebere’s Chicken Slice and Tawanda Nyambirai’s TN Grill.

In September TN expanded its fast food division with the addition of ice cream and pizza outlets across its network.

The growing competition has seen players reducing prices, with consumers now buying a two-piece chicken and-chips combo for as little as US$3,50 compared to US$4,50 previously.

Chicken Inn launched its dollar meal promotion which has seen pieces of chicken or a standard size of chips going for US$1 from the previous US$2.

At Innscor’s full year results briefing for the year ended June 30 2012, group chief executive Tom Brown admitted the group was feeling the heat coming from competitors in the fast food division.

To maintain an edge, he said, shareholders had approved a US$50million investment to facelift their products and improve the branch network.

“About US$38 million of that will be spent on our bakeries, fast foods, poultry business, Colcom and some on Capri,” Brown said. “We are going to continue with our expansion, improve efficiencies and hope to maintain revenue growth of 15%,” he added.

Innscor finance director Julian Schonken said the investment will see the company expand by adding 33 fast food outlets this year comprising Chicken Inn, Pizza Inn and Nandos.

An additional bakery production line with a capacity of 100 000 loaves per day is on schedule for installation this month, to bring capacity to 500 000 loaves per day.

Innscor has emerged as the biggest confectionery company after the collapse of its major competitor Lobels which faced operational challenges at the height of hyperinflation and economic stagnation.

In its financial statements, Innscor reported a 44% growth in operating profit to US$68,5 million after a 21% revenue growth from 2011 to US$627,1 million.

The group’s bakeries and fast foods division in Zimbabwe and across the continent recorded a 53% growth in bakery volumes in the period under review. Customer counts in its fast foods operations grew 11% after 13 counters were added to the store network across Zimbabwe in the period under review — eight in Harare, three in Marondera and two in Mutare.

Schonken said the company generated US$48 million in cash from operating activities.

OK Zimbabwe [companydatabase.org] 8 March 2011

Ok Zimbabwe Limited

OK Zimbabwe Limited is a supermarket retail chain. The Company's business covers three major categories: groceries, basic clothing and textiles, and house ware products. The groceries category includes butchery, delicatessen, takeaway, bakery, and fruit and vegetable sections. The bakeries, and fruit and vegetable operations are outsourced to Innscor and Favco respectively. Another specialist area is school wear. OK Zimbabwe Limited trades under three brand names: OK stores, Bon Marche stores and OK Express stores. All operations are carried out through a nationwide branch network that comprised 39 OK stores, five Bon Marche stores and 10 OK Express stores as of March 31, 2007.

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OK aims to claw back lost market share [allafrica.com] 8 March 2011

Zimbabwe: OK Seeks to Claw Back Lost Market Share

Chris Muronzi 25 March 2010

EARLIER this month, a representative of the Retailers Association of Zimbabwe (RAZ), a group of the largest retail companies in the country, told delegates at an industry breakfast meeting that the sector had suffered from the emergence of new players who do not play by the book.

His beef with the new players was that their prices were too low despite both importing from the same markets. In short, it was a curious case of the bigger player crying foul over dirty tactics at the hands of a smaller and inexperienced player.

The RAZ official did not grasp why "them," a Goliath in their own right, were losing against some dwarfish enterprises founded on thin capital at a game the big guys knew from the first letter of the alphabet to the last.

He had a theory though -- the smaller players must be avoiding duty and taxes. At the end of his speech, it was clear the official wanted authorities to probe smaller retailers.

The comments showed that the pendulum swung against the bigger players in the sector after President Robert Mugabe launched price controls in 2007 allegedly to stop profiteers bent on sabotaging the economy through price increases.

When the policy was launched, the retail sector was hit hard.

Almost overnight, shops became empty. Two years later, government adopted the use of multiple currencies but the damage had been done. Almost overnight new retailers emerged. Chinese, Nigerians and other ambitious businesspeople saw opportunities.

The bigger players were still on the corporate drawing board trying to make heads and tails of the new multi currency policy. In late 2008, the central bank had licensed shops to sell goods in foreign currency but many had resorted to importing groceries.

The official dollarisation of the economy saw the new entrants moving swiftly to acquire and rent space in the city. In a short space of time, the new players had set up shop and carved a niche of the retail market for themselves.

This year, OK Zimbabwe, the second largest retailer in the market, has everything figured out and plans to recapitalise the business and claw back market share.

OK plans to spend US$20 million to achieve this.

This will be achieved through a US$15 million rights issue at a price of US$0,6 cents per ordinary share and additional 250 275 133 million ordinary shares will be issued on the basis of 3,42 new ordinary shares and a US$5 million convertible loan.

The proceeds will be directed towards working capital growth and cutting short-term debt and strategic expansion of the retail network

The company hopes to get back lost market share and "compete effectively" in a trading environment where, by their own admission, bigger retailers have carved a sizeable piece of the market. Already players such as Afro Foods have gotten themselves a market share in a short space of time.

OK reckons fresh capital could increase trade capacity. But analysts said the retail sector has gone mostly to the new players -- Chinese, foreign owned outlets and many convenient grocery stores.

OK's situation is not entirely unique.

Delta also suffered in 2008 after bootleggers emerged on the market with various beer brands imported from the region and beyond. Delta's market share was gone almost overnight. But Delta's relationship with SAB Miller helped the company reclaim its old turf.

However, analysts say for OK Zimbabwe, the situation is a little different although an underwriting deal with Investec might change the fortunes of the company.

In the event that OK fulfills terms of a US$5 million convertible loan notes, the move would result in a dilution of 7% on conversion after the rights issue. This will give Investec 7% stake in OK Zimbabwe, a move that could bolster the company's financial position. Analysts say OK's battle to reclaim market share might be an uphill task and depend on a rights issue awaiting rubber stamping from other shareholders.

OK chief executive officer Willard Zireva and chief operating officer and finance director Alex Siyavora, who hold 14% in the group are said to have also thrown their support behind the deal.

Through its investment vehicle -- Investec Frontier Private Equity Fund, a pan African private equity fund managed by Investec Asset Management -- the company might emerge with a larger stake if some of the shareholders do not follow their rights.

Investec Group is an international banking group listed on the Johannesburg Stock Exchange and the London Securities Exchange.

Copyright © 2010 Zimbabwe Independent. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica aggregates and indexes content from over 125 African news organizations, plus more than 200 other sources, who are responsible for their own reporting and views. Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica.

AllAfrica - All the Time

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Zimyellow.com [8 March 2011]

Detailed Information Supplier of goods and services to the hospitality industry in Zimbabwe Hotelserve Holdings Location - Msasa/Harare Listed Under - Wholesale Supplier Tel [phone]    Fax [phone] Google Map - Click Here Email - Send Email Website - No Website Physical Address Postal Address 1 Martin Drive Msasa, Harare BACKGROUND Hotelserve Distribution was established in 1990 as a supplier of goods and services to the hospitality industry in Zimbabwe. In 1992 the company commenced supplies to retailers and wholesalers becoming, in the process, the brand representative for a number of leading international and regional manufacturers. With three distribution centres located throughout the country- Harare, Bulawayo and Victoria Falls- Hotelserve is well placed to service all geographical  regions of Zimbabwe. Each depot is fully equipped with dry goods storage, refrigeration ( chilled and freezer) and distribution vehicles. The Harare depot also has customs bonded warehouse facilities where goods are stored whilst foreign currency is sourced and also help in reducing duty outlays. Staff compliment is 120 which include office and admin, sales merchandising, warehousing and deliveries. CUSTOMER AND SUPPLIER RELATIONSHIPS CUSTOMERS Hotelserve enjoys close and mutually rewarding relationship with its customers and suppliers. All major wholesalers, retailers, hospitality operators, restaurants and departmental stores arse customers as well as significant number of independent operators. There are three major retail groups, all of whom are customers. These are : TM Supermarkets – the largest retail group, part of Kingdom Meikles Africa Ltd, Zimbabwe’s largest public listed company. TM is 25% owned by Pick n pay South Africa. Spar Zimbabwe – the fastest growing chain in the country with in excess of 30 stores countrywide. OK Zimbabwe – includes Bon Marche’ luxury supermarkets. Major wholesalers, all of whom are customers  : Jaggers (associated to Metcash), Makro, Redstar and Mohammed Musa. All hotel groups including African Sun Limited, Cresta Hospitality, Rainbow Tourism Group and Victoria Falls Safari lodge are and have been customers for  a number of years. The relationship with all of the operators and others is such that our vehicle fleet is utilised by them to carry critical consumable needs besides those supplied by ourselves. SUPPLIERS Hotelserve imports and  distributes a number of leading consumer brands exclusively into Zimbabwe from significant brand owners. These are : Nestle` - Confectionery, Cross and Blackwell, Maggi, catering products and pet care (Alpo and Friskies) National Brands – Bakers, Pyotts, Baummans I & J – Frozen fish and meat products. Oceana – Lucky Star Pilchards Appletizers – Carbonated beverages. DGB – Boschendal, Douglas Green, Butlers Diageo (Brand house) – Johnnie Walker, J&B, Bells, White Horse, Gordon’s, Captain Morgan, Baileys etc McCains – Frozen vegetables Parmalat – Purejoy fruit juices, Everfresh Milk, Bonita Butter etc General Mills – Cake mixes and other flour products Lillets – Women’s sanitary wear Tradall – Barcadi, Martini, Bombay Sapphire GROUP COMPANIES SHIPSERVE (PVT) LTD Hotelserve Distribution established its own clearing agent, Shipserve (Pvt) Ltd, in 2000 to facilitate customs clearing of imports from various principals. Over the years this business has added a number of the FMCG importers to its customer base. With clearing offices in Harare, Beitbridge and Chirundu, this company includes the following in its customer base : TM Supermarkets- clearing, bond storage house brands. Nestle` Zimbabwe- clearance, bond storage raw materials and export clearance Spar Zimbabwe- clearance and bond storage  house brands African Distillers- clearance and bond storage Innscor Africa- clearance and bond storage various group companies Kingdom Meikles Africa –clearance and bond storage ESTIMATED SALES VOLUMES PER MONTH Including all products 15000-20000 cases with an estimated sales value of USD800 000 to USD1200000 depending on the availability of product. SHOP SIZE Our Harare warehouse has a single floor space of 2000 square metres. SYSTEMS FOR QUALITY CHECKS All our products are manufactured in countries that uphold high quality control and standards and as such all come with relevant food warnings and expiry dates noted on the packaging. In terms of our operation we have adopted a first in first out stock control method.

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