Ok Zim acquires Food Lovers Market franchise, enters new business spaces

OK Zimbabwe has acquired the Food Lovers Market franchise for Zimbabwe and also entered into two other new spaces as part of widening customer choices and remaining relevant to the shopping public.

Food Lover’s Market is a South African supermarket chain that operates franchised grocery stores and convenience stores in Southern Africa and in addition to Zimbabwe has other stores Botswana and Namibia.

Maxen Karombo, the group’s chief executive, told an analyst briefing the company will have the Food Lovers territorial rights for the whole country except for the Greendale branch which is under a different franchise arrangement.

“In our last report, we had a cautionary statement on an investment the group was making and today we announce the acquisition of Food Lovers Market for Zimbabwe,” he said while presenting the group’s half year financials for the period ended September 30, 2022.

He added, “Food Lovers, now part of the group and what we have is Food Lovers Borrowdale, Avondale and in Bulawayo. It excludes the Greendale shop because it is under a different franchise arrangement.”

Karombo said the franchise gives OK Zimbabwe a good space to grow in super premium retail and from the services and products that it will offer.

“We will have synergies across the group and have partnerships with local producers, suppliers and shoppers. We will be investing into this brand and we will look at new stores,” he said.

He noted that Zimbabwe is one of the growth areas of Food Lovers which has 110 stores across the region. He said they have six eateries and 246 coffee outlets throughout the region servicing in excess of 380 000 customers per day.

The group’s other new offering is into pharmacy. Karombo said the group has developed a new pharmacy offering, the Allowel Brand.

“This is a wholly owned brand. We terminated the arrangements that we had with previous operators because it was on a lease we have taken this in-house and we will be offering to the market fresh pharmacy range,” he said.

He said that through the pharmacy, the group will be providing a health service to the 160 000 customers who come through its shops every day, making this a one stop shop for its shoppers.

“We will be opening our first pharmacies in Borrowdale at Bon Marche and Ok Glenview in Harare which already have the supporting infrastructure,” said Karombo.

He said the third business is that the group has entered into a strategic alliance with ShopRite Checkers Group of South Africa on two specific areas.

He said one would be on private label and the second is when moving forward, leveraging on the financial services.

“Customers will be seeing in our stores the Ritebrand, again this is just to bring closer to what people usually travel across the border for. We have a plethora of products under the partnership in our stores,” he said.

He noted the partnership is about widening the choice for shoppers not product substitution because at the moment 90 percent of products in OK stores are locally sourced.

“Therefore, we are just widening choice, affordability and ensuring that we remain relevant to our shopping public,” he said.

However, for the period under review, group revenue in hyperinflation terms went up by 34,91 percent to $129 billion and in historical terms by 312 percent.

Group chief financial officer Phillimon Mushosho said the company’s performance was above inflation.

“However, we were trading under a difficult environment, particularly the second quarter when the monetary and fiscal measures were put in place to stem the liquidity challenges in RTGS terms.

“OK Zimbabwe being a formal retail chain trading in RTGs and when you are in a market starved of liquidity, this translates to volume decline and on our part we witnessed an 8 percent decline in volumes,” he said.

He indicated that in an environment of liquid crunch and shortage of money, people were focused on accessing basics, therefore what performed well was the groceries and liquor segments.

“Other goods such as electrical, clothing were considered luxuries and suffered in terms of volumes.

“But as management in order to mitigate the effects, we ran the promotions such as the Grand Challenge,

Live it Up at Bon Marche and others at OK mart and we are currently running the Christmas promotions, all as part of efforts to recover the volumes,” he said.

Mushosho said the group’s operating income went up by 370 percent in historical terms and 142 percent in inflation terms.

He noted that the merging of parallel rates which is now changing saw increased USD sales.

However, Mushosho said the group continues to see increased impact of the 2 percent IMTT tax and will continue to engage the authorities.-ebusinessweekly