Simbisa pushes ahead with expansion amid severe economic headwinds

CLOUDINE MATOLA

Victoria Stock Exchange-listed quick-service restaurant (QSR) giant, Simbisa Brands Limited, is forging ahead with its expansion plans in Zimbabwe despite a challenging economic environment, Business Times can report.

The company is set to open 10 new outlets by June  this year, six of which will be drive-thru locations, while also undertaking a significant refurbishment of 12 existing counters by the end of the financial year.

This strategic move underscores Simbisa’s resilience and commitment to long-term growth, even as Zimbabwe’s macroeconomic environment remains volatile, characterized by high inflation, currency instability, and rising operational costs. The Group’s leadership remains confident that expansion, coupled with investments in technology and operational efficiencies, will drive sustained market growth and enhance customer engagement.

Simbisa’s CEO, Basil Dionisio, reaffirmed the company’s focus on strengthening its market presence.

“Despite economic headwinds, the Group remains committed to expanding its footprint in Zimbabwe. We are set to open 10 new counters by June 2025, six of which will be drive-thru outlets. Additionally, 12 counters have been earmarked for refurbishment by the close of the financial year to enhance customer experience and brand appeal,” Dionisio stated.

This expansion drive aligns with Simbisa’s long-term growth strategy, which prioritizes high-traffic locations and convenience-oriented service models. The introduction of more drive-thru locations is a direct response to shifting consumer preferences, particularly among urban customers seeking faster, more efficient service experiences.

The growing demand for quick-service restaurants has led to increased competition, with brands seeking to establish dominance in high-density areas and major urban centres.

Despite this competition, Simbisa has maintained its position as a market leader through strategic expansion, brand loyalty, and operational efficiencies.

Simbisa’s growth strategy is not only centred on physical expansion but also on digital transformation, particularly in the delivery segment.

The company recognizes that consumer behavior is shifting toward digital convenience and is investing heavily in technology to enhance its delivery services.

Dionisio highlighted the importance of leveraging digital platforms to optimize delivery operations.

“We see significant growth potential in our delivery segment. By enhancing technological efficiencies, expanding delivery zones, and offering exclusive deals, we aim to accelerate the adoption of our delivery services. Consumer demand for convenience continues to rise, and we are positioning ourselves to capitalize on this trend,” he explained.

To achieve this, Simbisa has introduced an integrated delivery management system that optimizes delivery routes using artificial intelligence, ensuring faster service.

A mobile ordering app with exclusive promotions has been launched to drive customer engagement and repeat orders. Additionally, the company has formed partnerships with third-party logistics providers to improve delivery efficiency and enhance customer satisfaction. Real-time order tracking has also been implemented, allowing customers to monitor their orders from placement to arrival.

These efforts are already yielding results, with Simbisa reporting a 29% year-on-year growth in delivery volumes for the first half of 2025. Quarter-over-quarter, delivery orders rose by 20%, with a total of 202,970 deliveries completed during the six-month period. This surge reflects the success of improved logistics, targeted marketing, and an increased focus on delivery-exclusive promotions.

Despite Zimbabwe’s deteriorating economic conditions, Simbisa has demonstrated resilience in revenue growth. The Group reported a 4% increase in revenue in Zimbabwe during the six months to December 31, 2024, primarily driven by a 7% increase in customer footfall.

However, the average spend per customer contracted by 3% year-on-year, reflecting consumer spending pressures amid inflation and economic instability.

Simbisa added a net of 38 new counters in Zimbabwe between December 31, 2023, and December 31, 2024, bringing the total number of outlets in the country to 339. During the half-year under review, 16 new counters were opened, including three Chicken Inn drive-thrus, two Nando’s drive-thrus, and the first-ever Steers Drive-Thru in Gweru. The growing preference for drive-thru formats reflects changing consumer habits and a post-pandemic shift toward minimal-contact service.

Operating in Zimbabwe’s volatile economic environment has presented significant challenges for Simbisa, particularly in terms of cost management and profitability.

During the financial period under review, the Group faced margin pressures due to persistent inflation, rising utility costs, frequent power outages, and exchange rate volatility. These factors have significantly increased operational costs, affecting overall profitability.

To mitigate these pressures, Simbisa implemented a series of cost-containment measures aimed at maintaining operational efficiency while sustaining profitability. The company optimized its workforce by streamlining staffing levels to match demand, ensuring maximum efficiency without compromising service quality. It also introduced electricity usage management strategies, including investments in solar power solutions for select outlets, to reduce reliance on the unstable national grid.

Additionally, the company has focused on minimizing food wastage by improving inventory management and demand forecasting, ensuring that surplus stock is kept at a minimum. Preventative maintenance strategies have been adopted to reduce unexpected equipment failures and associated downtime, ensuring uninterrupted service. In the supply chain, Simbisa has negotiated better pricing from suppliers and diversified sourcing channels to mitigate risks associated with currency fluctuations and import costs.

Despite these economic challenges, Simbisa remains financially stable, supported by a strong revenue base and a cost-efficient operational structure.

Simbisa’s leadership remains optimistic about the company’s long-term growth prospects despite short-term economic volatility. The company is focusing on three key strategic pillars to drive future growth: accelerated expansion in key markets, digital transformation, and strengthening brand equity.

Beyond Zimbabwe, Simbisa is exploring expansion opportunities in other African markets, particularly in Southern and East Africa.

The Group has already established a presence in Kenya, Ghana, Mauritius, and Zambia and is expected to further expand its footprint across the continent.

The company will continue investing in digital transformation initiatives, with an emphasis on enhancing mobile ordering platforms, AI-driven delivery route optimization, and data analytics for targeted marketing campaigns.

By adopting a tech-driven approach, Simbisa aims to increase customer retention, boost sales, and drive operational efficiencies.

Strengthening brand equity and customer experience remains a top priority. Simbisa is focusing on store refurbishments to enhance ambiance and service efficiency, new product innovations to cater to evolving consumer tastes, and leveraging customer feedback to refine service offerings. By continuously improving its value proposition, the company aims to maintain its competitive edge in Zimbabwe’s fast-food sector.

Simbisa Brands is demonstrating exceptional resilience by expanding its footprint, strengthening its delivery services, and implementing strategic cost-management initiatives amid a turbulent economic climate.

With a clear focus on innovation, convenience, and operational efficiency, the Group is well-positioned to navigate current challenges while driving long-term shareholder value.

As Zimbabwe’s economy continues to evolve, Simbisa’s ability to adapt and execute its growth strategies will be key in maintaining its dominant position in the country’s competitive fast-food sector.

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