Innocent Sibonginkosi Ncube
Simbisa Brands, Zimbabwe’s largest fast-food company, faced a significant crisis earlier this year due to a shortage of potatoes, which impacted their ability to serve one of their core products: chips. CEO Basil Dionisio noted that the company relies on medium to large potatoes for their offerings, and the shortage frustrated customers who enjoy their “chicken and chips”.
Strategic Adjustments
To prevent a recurrence of this issue, Simbisa is taking proactive measures by contracting local farmers to grow the specific type of potatoes needed, thereby ensuring a steady supply chain. This initiative reflects a broader strategy to maintain brand integrity and customer loyalty, even amidst rising costs and economic pressures.
Expansion and Refurbishment Plans
Despite the challenges, Simbisa has continued to expand, opening 52 new outlets in Zimbabwe over the past year, marking the fastest growth in the company’s history. However, the company plans to shift its focus from expansion to refurbishing existing stores, investing US$3.1 million to enhance the customer experience in 27 outlets.
Financial Overview
The financial landscape for Simbisa has been tough, with operating expenditures rising by 13%, outpacing a 6% increase in revenue. Operating profit fell by 4%, largely due to increased costs for electricity and the doubling of potato prices during the crisis. The company is now tasked with adjusting its revenue strategies to align with these persistent cost pressures.
Future Outlook
Simbisa aims to revamp its outlets, strengthen supply chains, and enhance marketing efforts to drive sales. Dionisio emphasized the importance of keeping their businesses refreshed and up to date, acknowledging that they had previously lagged in this area. The company recognizes that maintaining customer engagement and loyalty is crucial for navigating the current economic challenges.
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