Business Reporter

ZIMBABWE Stock Exchange (ZSE) Listed fast food retail group, Simbisa Brands Limited, says it is increasing focus on diversifying customer service channels and expanding its domestic and regional footprint, in line with the "new normal".

Businesses have been variably and negatively impacted since the outbreak of the Covid-19 pandemic in December 2019.

For Simbisa, this reduced consumer buying power, as economic activity slowed down during lockdowns across markets.

The group also registered 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 to contain the disease.

However, Simbisa has increased its adoption of digital systems and during the year to June 30, 2021, focus was on improving efficiencies in the delivery business and growing revenue streams by growing the delivery channels.

The company says the strategy has yielded positive results and the group is looking to maintain the initiatives this current financial year with new stores expected to be launched.

In terms of the strategy, the group seeks to establish more drive through service facilities in addition to delivery services to clients, which all promote social distancing protocols.

"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.

In Kenya, the group has established an independent delivery service business, which has been successful in growing the delivery contribution in that 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."

Last year, Simbisa managed to expand its regional footprint while at the same time managing the adverse effects of the Covid-19 pandemic.

The expansion programme resulted in the opening of 22 new counters in the region; 16 were in Kenya. Namibia was converted into a franchised market effective July 1, 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," Mr Dioniso said, adding the system will unlock significant value through increased automation of work processes and improved system efficiencies and employee effectiveness.

Copyright The Herald. Distributed by AllAfrica Global Media (allAfrica.com)., source News Service English