- Meikles’ loss ballooned 10,889% to ZWG165.7 million, driven by exchange losses, rising operating costs, and weak consumer demand in Zimbabwe’s formal retail sector
- TM Pick n Pay, contributing 98% of group revenue, swung sharply into loss as margins compressed and operating costs surged
- Hospitality and properties provided partial relief with firmer revenues, while a cautious recovery is expected in 2026, hinging on festive season sales, higher USD receipts, and operational reforms
Harare - Meikles Limited has slipped deeper into the red, with its inflation-adjusted loss for the six months to 31 August 2025 ballooning to ZWG165.7 million, a dramatic surge from the near-break-even position of ZWG1.5 million recorded in the same period last year according to the short form unaudited interim financial results.
The sharp deterioration in earnings underscores intense pressure in Zimbabwe’s formal retail sector, where rising operating costs, soft consumer demand, and currency-related shocks continue to erode profitability.
The financial blowout was driven largely by a cocktail of exchange losses, subdued US-dollar sales volumes, and rising operating expenditures, particularly within the Group’s flagship supermarket segment.
While revenue rose 12% to ZWG6.0 billion in inflation-adjusted terms, the gains were insufficient to cushion the mounting cost burden, with net operating costs jumping 32% and margins tightening across key units .
TM Pick n Pay, which contributes 98% of the Group’s revenue, remained the primary pressure point. The segment swung from a profit of ZWG27.0 million last year to a loss of ZWG143.0 million, weighed down by a contraction in gross profit margin from 31% to 28% and a rise in operating cost margin to 31% from 27% .
Despite a steady increase in USD-denominated sales up to 48% of revenue by August the retailer struggled to shake off the effects of suppressed consumer demand and lingering operational inefficiencies.
An exchange loss of ZWG65.1 million, originating from remeasured USD trade payables, dealt the most significant blow to the bottom line.
Counterbalancing the retail strain, the hospitality segment posted firmer results following the Board’s reversal of its earlier divestment decision. Revenue rose to ZWG96.6 million, supported by stronger average room rates and improving occupancy, while profit after tax climbed to ZWG12.5 million up 2% in USD terms despite upward cost pressures.
The properties segment also delivered upward momentum, with revenue rising to ZWG21 million and USD-denominated reporting enhancing the clarity of performance. However, profit retreated to ZWG3.3 million due to finance charges and the absence of prior-year disposal gains.
Looking ahead, Meikles is likely to see a cautious recovery over the next year, supported initially by the festive season, which should provide a temporary but meaningful lift in supermarket sales.
The continued rise in USD receipts already up to 48% by August will help strengthen margins and reduce the distortive impact of ZWG-denominated transactions.
Operational reforms at TM Pick n Pay, including tighter cost controls and supply-chain optimisation, are expected to begin yielding tangible efficiencies in early 2026. However, currency volatility remains the most significant short-term threat, as any widening gap between official and market exchange rates could once again inflate USD payables, trigger exchange losses, and undermine earnings momentum.
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