The Zimbabwe Sentinel-Media Centre

Telling the other story – MEDIA CENTRE

Analysis Economy

Foreign Retail Franchises Outflanking Local Businesses

Prince Njagu

Local manufacturing and retail franchises are under pressure as foreign companies continue to trickle into Zimbabwean markets and flood the shelves with cheap imported commodities.
The influx of cheap imported commodities into the Zimbabwean market has seen indigenous fast food retail outlets; Chicken Inn and Chicken Slice come under strain in relation to their market share.
This incursion of foreign franchises has now moved into the retail business were players such as Pick n Pay have not made the situation any better for local franchises.
South African based Pick n Pay is said to have interests in making a $21 million investment in the Zimbabwean grocer sector, as cited in a local newspaper.
Linda Gutsire a customer told the Sentinel that they preferred to shop at Pick n Pay as the service in the shops was better and it gave them the South African shopping experience while they are on Zimbabwean soil.
“I drive ten kilometer’s from were I stay to Kamfisa Pick n Pay so that I can get the South African shopping feel and the good cliental service which they offer”, said Linda
An independent economic commentator who requested anonymity noted that there was need for a holistic approach to resuscitate the economy and support indigenous ventures.
Indigenous fast food operators and retail shops are finding the going tough as they are currently encumbered by lack of capital to invest in the business and deteriorated equipment among other challenges.
A source within the Pick n Pay Marketing Division who spoke on condition of anonymity said that the collaboration with the South African franchise was to get technical expertise and assistance in sourcing of the much needed South African brands.
“Most of the products that we sell in our stores are imported from South Africa and the quality of the products is similar to those in our South African stores”
“The prices are slightly higher in our Zimbabwean Pick n Pays’; as we will be trying to cover the importation costs; in terms of product diversity we control the market”, said the source.
The government needs to protect local franchises as the indigenous companies are still suffering from the effects of the hyperinflation and stiffer competition from foreign million dollar franchises like Kentucky Fried Chicken (KFC) and Pick n Pay who have become a force to reckon with in the local market.
KFC is the world’s second largest fast food chain, as measured by sales, with 18,875 outlets in 118 countries and territories as of December 2013; with the franchise puts a lot of investment in customer service and adverts.
A tour at the KFC outlet showed a long queue of people grabbing a bite as they will be refueling their vehicles along the Sam Munjoma Extension.
Our local franchises in the service and manufacturing industry are fast turning into graveyards; with the few that are still operational incurring high production costs and not being able to withstand foreign competition.
“In the fast food sector; local companies have to raise chickens for at least six weeks before they are ready for slaughter and they do not have enough disposable income to put into advertisements”
“This is not the case with the genetically modified birds which foreign franchises bring into the fast food industry; in at-most a day you will be having hundreds of live birds on the market; at a very low cost,” said Antony Nyamuda an animal science specialist.
Foreign franchises will have more money to invest in after self-service and heavy advertisements


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Chief Editor: Earnest Mudzengi Content Editor: Willie Gwatimba