South African retail heavyweight Pick n Pay Group Limited has reported a staggering financial downturn in its Zimbabwean operations, writing off its entire investment in TM Supermarkets following mounting losses, economic turmoil, and currency instability. This development underscores the immense challenges faced by businesses operating in Zimbabwe’s volatile economic environment.
In its audited financial statements for the 53 weeks ending March 2, 2025, Pick n Pay disclosed an unrecognised loss of R51 million from its associate TM Supermarkets, a sharp contrast to the R212 million net contribution recorded in the previous financial year. This shift not only marks a financial blow for the group but also signals growing unease about Zimbabwe’s economic trajectory.
The R51 million loss, driven primarily by Zimbabwe’s hyperinflation, severe currency devaluation, and policy inconsistencies, has led the group to fully impair its 49% stake in TM Supermarkets. The investment has now been written down by R254 million, effectively reducing its carrying value to zero on Pick n Pay’s books.
Pick n Pay entered Zimbabwe through a joint venture with Meikles Limited, the parent company of TM Supermarkets, in a bid to establish a solid retail footprint in the southern African region. The venture had been profitable for several years, benefiting from strong local demand and market dominance. However, worsening macroeconomic conditions have dramatically altered the landscape.
In a statement included in the financial disclosures, the company said:
“The group accounts for its investment in associate under the equity method of accounting in accordance with IAS 28, Investment in Associates and Joint Ventures. Zimbabwe continues to be assessed as a hyperinflationary economy, and as such, the group applies IAS 29 – Financial Reporting in Hyperinflationary Economies.”
Due to the economic instability, the group no longer recognises any share of profits or losses from TM Supermarkets, given that the investment’s carrying value has now been reduced to zero. This means the venture, despite having a network of 74 stores across Zimbabwe, is no longer contributing financially to Pick n Pay’s consolidated earnings.
While the local operations continue to function and serve customers, Zimbabwe’s spiralling economic situation—marked by rapidly rising prices, unreliable electricity supply, and a severely weakened local currency—has made it nearly impossible to repatriate profits or achieve sustainable returns. As of February 28, 2025, the Zimbabwean dollar was trading at ZWL$18.5 to US$1, further complicating earnings conversion into the South African rand.
Despite these regional challenges, Pick n Pay managed to report a 3.2% increase in total group turnover, reaching R115.92 billion for the financial year. However, its Rest of Africa segment—which includes operations in Zimbabwe, Zambia, Namibia, and Botswana—performed below expectations, generating R3.4 billion in turnover, down from R3.61 billion in the previous year.
Within that segment, turnover declined by 5.7%, with the company citing currency devaluation in Zambia and softening demand in Namibia, where its franchise agreement is nearing expiry.
In a broader strategic overview, Pick n Pay stated:
“Solid progress was made on both strategic initiatives during the financial year 2025. Pro forma 52/52-week turnover declined 0.3%, with Pick n Pay South Africa flat and Rest of Africa declining 5.7%.
Pick n Pay Writes Off Zimbabwe Investment Amid Hyperinflation and Currency Volatility
These regional struggles have forced the company to reassess its approach to operations beyond South Africa. Management acknowledged ongoing challenges across its African footprint and noted that plans are being developed to improve profitability in key markets, although Zimbabwe remains a particularly difficult environment to navigate.
Analysts view the complete impairment of the TM Supermarkets stake as a significant red flag, reflecting not only the current economic dysfunction but also the diminishing prospects for recovery in the near term. Without meaningful macroeconomic reform, monetary policy stability, and foreign currency access, any future gains from the Zimbabwean market appear unlikely.
For now, TM Supermarkets remains a non-contributing entity in Pick n Pay’s portfolio. While its 74 stores continue to operate and serve communities, their financial value to the group has effectively been nullified. The move to write off the investment is a sobering reminder of the risks faced by multinational businesses in high-volatility emerging markets.
Pick n Pay’s experience in Zimbabwe could serve as a case study in the importance of economic governance and policy consistency in attracting and retaining foreign investment. Until Zimbabwe’s business climate stabilises, it is likely that Pick n Pay’s future role in the country will be minimal and cautious, focused on maintaining operations rather than pursuing aggressive growth.
