Formal retail capacity expands through a market where informal traders retain a strong price advantage

• TM Pick n Pay returned its supermarket division to operating profit and opened a new Shurugwi store as unit sales increased 6 percent
• SPAR is adding independently operated stores while Bhola is expanding from hardware into supermarkets and Mega Mart formats
• Informal traders remain a major competitive force, with a recent consumer basket study pricing basic goods about 12 percent below formal retail

Zimbabwe’s supermarket network is expanding again as TM Pick n Pay, SPAR and Bhola commit additional capacity to a market that has simultaneously pushed former leader OK Zimbabwe into corporate rescue.

TM Pick n Pay opened a supermarket in Shurugwi during its year to February 2026 and invested about US$3.2 million in capital expenditure funded entirely from internal cash generation. Unit sales increased 6 percent, gross margin widened to 29 percent from 23 percent and the supermarket division moved from an operating loss of ZWG516.3 million to an operating profit of ZWG63.7 million.

The expansion followed a year in which customers visited stores more frequently and bought more units even as average basket values weakened. United States dollar sales increased from an average 23 percent to 45 percent of supermarket revenue, improving the foreign currency available for procurement and inventory replenishment.

SPAR is also adding capacity through a different ownership structure. A new SPAR supermarket opened in Mazowe in March with 970 square metres of grocery retail space and another 130 square metres allocated to its liquor operation. The store carries more than 4,300 products and serves a catchment area covering agricultural and mining workers, highway traffic and the surrounding community. SPAR Zimbabwe operates through independently owned retailers under the international brand and support system.

Bhola is widening the competitive field from outside the traditional supermarket establishment. The business built its original footprint in hardware before moving deeper into groceries and Mega Mart formats. Local reporting on its expansion describes a model built around aggressive sourcing from domestic and foreign suppliers, broad product range, multi currency trading and price competition with smaller informal outlets.

Additional formal capacity is therefore entering a market where the operating pressures that damaged established retailers remain present.

Informal stores continue to compete aggressively on price, proximity and operating cost. A 2026 IH Securities consumer study found that a 16 item basket of staples was around 12 percent cheaper in tuckshops than in formal retailers. Formal chains carry tax, labour, property, utilities, licensing and compliance costs that smaller traders can often avoid or absorb differently.

The pricing gap has already altered consumer behaviour. In 2024, OK Zimbabwe, SPAR and TM Supermarkets warned that exchange rate rules were leaving formal retailers more expensive than informal competitors. Retailers reported losing customers as suppliers priced goods around parallel market currency conditions while formal stores remained subject to official pricing rules.

OK subsequently developed deeper company specific problems. By May 2025 it owed suppliers US$30.34 million, had closed five stores and was struggling to maintain stock in parts of its network. Shareholders backed a US$30 million recapitalisation programme as management sought to stabilise liquidity and rebuild supplier relationships.

The expansion by other operators places those difficulties within a broader competitive market. Demand has continued supporting additional retail investment even as informal commerce takes a large portion of household expenditure.

TM Pick n Pay’s volume recovery provides one measure. Customers purchased 6 percent more units during its latest financial year despite weaker average basket values. The business generated sufficient operating cash to finance additional stores without overdrafts or interest bearing borrowing.

SPAR’s model distributes part of the expansion decision across independent operators. Store owners provide local capital and operating execution while accessing the SPAR brand, procurement support and retail systems. This allows new capacity to enter specific catchment areas without concentrating every expansion project on one corporate balance sheet.

Bhola approaches the same market from a smaller operating base and without the legacy store structures accumulated by the traditional chains. Its expansion from hardware into grocery gives management greater flexibility over store location, product mix, procurement and operating format as new sites are developed.

The next competitive layer is already becoming visible in the technology attached to those physical stores.

TM Pick n Pay operates an online shopping platform and mobile application offering home delivery and store collection. Customers can order against inventory attached to the existing branch network, allowing the physical store to serve both walk in demand and digitally initiated purchases.

South Africa provides a larger scale measure of where that model can travel. Shoprite’s Sixty60 generated R25.5 billion in sales in the year to June 2026 after growing 34.5 percent. The platform now carries sales equivalent to about 11 percent of Shoprite’s South African supermarket business.

Zimbabwe begins from a different retail structure. Informality is deeper, consumer price sensitivity is higher and power, data and logistics increase the cost of digital fulfilment. The existing store networks still provide valuable infrastructure. Inventory, cold storage, suppliers, locations and customer relationships can support additional forms of distribution once economics allow.

That raises the productivity threshold for the current expansion cycle.

A newly opened store must compete with formal chains for assortment and purchasing scale and with informal traders for price and proximity. Digital ordering adds another route to the customer. Reliable inventory and procurement determine whether each channel can be serviced consistently.

TM Pick n Pay enters this phase with a national network, improving volumes and an existing online channel. SPAR combines local ownership with an established retail system. Bhola is building capacity with fewer legacy structures and greater freedom to design its formats around current consumer behaviour. OK first has to restore working capital, supplier confidence and stock availability across its existing footprint.

Zimbabwe’s supermarket capacity is therefore being redistributed as new stores enter the market and weakened capacity changes ownership or loses relevance. Informal trade continues to set a demanding price benchmark. Formal operators are responding through procurement, new formats, store expansion and digital access.

The businesses that convert those assets into higher stock turns, greater customer frequency and stronger sales per location will capture the larger share of Zimbabwe’s next retail cycle.