Simbisa diversifies customer service channels in line with the “new normal” trading environment

Listed fast-food group, Simbisa Brands Limited says it is increasing its focus on diversifying customer service channels as it expands its footprint locally and across the region in line with the “new normal.”

Since the outbreak of the Covid 19 pandemic in December 2019, businesses have been adversely affected in varying degrees.

For Simbisa, this resulted in a decrease in consumer buying power as economic activity slowed down during lockdowns across markets as well as a decrease in customer count and revenue due to reduced trading hours, banning of sit-in meals, and other social distancing measures that were implemented.

However, the group has also increased its adoption of digitalisation and during the year to June 30, 2021, focus was on improving efficiencies in the delivery business and growing revenue streams through delivery channels, a strategy the group is maintaining this current financial year with new stores expected to be launched.

Under this initiative, the group is looking at drive-through services in addition to delivery services which all promote social distancing initiatives.

“The group’s focus remains on growing our footprint with 92 new stores in the pipeline in FY22 at an estimated investment cost of US$19,3 million. Of these stores, eight will be Drive-thru sites in line with increased focus on diversifying the group’s customer service channels,” said chairman Addington Chinake in the group’s annual report.

Already in Kenya, the group has established an independent delivery business, which has been successful in growing the delivery contribution in this market whilst enhancing cost efficiencies and refining performance for an improved customer experience.

Chief executive officer Basil Dioniso said: “It is the group’s strategic intent to replicate this model in some of our other markets over time, whilst in other smaller markets, partnering with third-party delivery service providers has proved to be a successful strategy in growing delivery revenue streams.

“With the gradual easing of trading restrictions in our operating markets, we expect an improvement in trading capacity and continued growth in customer counts to drive revenue growth.

“New revenue streams from an improved, more efficient delivery business will also underpin top-line growth in the short to medium term. Continued cost management to maintain or make further traction in improving operating efficiencies will translate into increased profitability and shareholder returns.”

During the previous year, the group managed to further expand its regional footprint while at the same time managing the adverse effects of Covid-19 pandemic. The expansion programme resulted in the opening of 22 new counters in the region, with 16 were in Kenya. Namibia has been converted into a franchised market effective 1 July 2021.

While the impact of Covid 19 on businesses will also depend on developments such as progress on vaccinations across the globe and the government interventions across markets – particularly the decision on when borders and international travel are likely to go back to the old normal –management is upbeat its initiatives will yield positive
results.

The group is also leveraging the use of technology as a driver for efficiency and growth.
“As we see our operating markets adjusting to the ‘new normal’ trading environment, with an easing in restrictions and a recovery in trading capacity, the intention is to accelerate growth in our footprint whilst still ensuring strong organic growth and recovery in our existing business.

“As part of the strategy to leverage technology to improve efficiencies and drive growth in the business, Simbisa is moving onto an upgraded ERP system, as previously communicated to stakeholders.

“The scoping and design phase has been completed and the implementation of the system is in progress with Simbisa’s largest market, Zimbabwe, having migrated onto the upgraded system from 1 July 2021,” said Dioniso adding the system will unlock significant value through increased automation of work processes and improved system
efficiencies and employee effectiveness.-newsday.co.zw