TM PnP ‘sticks to its guns’

TM PICK n Pay (TM PnP) says it will not buckle under pressure and wantonly increase prices in line with rising foreign currency parallel market rates and inflation.
This comes as prices of goods and services have spiked dramatically since the start of October on the back of intensifying foreign currency shortages, made worse by the market’s frantic response to fiscal and monetary measures put in place by government, including a two percent tax on electronic transactions and the introduction of separate foreign currency accounts.
While some of the price increases have been justifiable, with the drastic deterioration of the exchange rate for transferable deposits and bond notes against the US dollar on the parallel market, the uncertainty caused by the situation has however forced some businesses into arbitrary price increases which cannot be justified by taxes or the developments on the parallel market.
The Meikles’ retail unit has, however, only adjusted prices in response to its suppliers’ quotes.
“We have not adjusted our prices despite pressures in the market to do so; we have stuck to our guns,” Malcolm Mycroft, TM PnP’s managing director, said at the group’s 81st annual general meeting on Tuesday last week.
“We have a simple business philosophy at TM PnP, whatever the cost or price is from our supplier, we apply our specific category margins to that product, irrespective of what it is. We don’t use the rate from the street, we don’t use a what-if rate, we have simple margins and we have committed to this over the past 45 days,” he added.
Mycroft said the retailer has also had some suppliers demand cash.
“But we have not buckled to those pressures,” he said.
He noted that the retailer is currently revamping seven of its existing outlets while the development of an outlet in Victoria Falls “is on track”.
“With the developments that are happening with the hotel as well, it looks like the group is going to have a good presence in the resort town,” Mycroft said.
A refurbishment of the group’s Victoria Falls Hotel is set to commence this year. The retail chain’s boss also defended TM PnP’s policy to limit the amount of goods that can be bought by a single customer.
“Some say we are being unfair. Well, yes we are being unfair to the street vendors that come into our store and buy copious amounts of goods and then go and sell the same stuff outside the store for five times what we would have sold it to them for,” he said.
TM PnP’s revenue for the half year ended September 30, 2018 amounted to $305,6 million, a growth of 32 percent from $232 million during the comparable period the previous year. The retailer says the rise in revenue was underpinned by a considerable growth in the number of units sold.
Meikles, TM PnP’s parent company, recorded growth of 467 percent in profit after tax from continuing operations to $15,3 million from $2,7 million achieved the same period the previous year. The group’s profit after tax for the six month-period surpassed the results for the full financial year ended March 31, 2018 of $7,7 million by 99 percent.
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