HARARE – Mounting economic pressures across its key markets were compounded by socio-political unrest in Zimbabwe, contributing to a challenging third quarter for Victoria Falls Stock Exchange-listed fast-food chain, Simbisa Brands Limited, despite achieving overall revenue growth.
Despite achieving a 4% year-on-year revenue growth in the third quarter ended 31 March 2025, Simbisa faced headwinds in Kenya, and Eswatini, according to its recent trading update.
In Zimbabwe, despite relative currency stability, Simbisa experienced a challenging operating environment marked by inflationary pressures, tax policy changes, and fiscal tightening, which eroded consumer purchasing power.
This, according to the group’s Chief Executive Officer, Basil Dionisio, resulted in a price-sensitive market where customer footfall remained flat YoY, although average spend increased by 19%, leading to a modest 1% revenue growth in the quarter.
The introduction of a 1% fast-food tax further pressured gross profit margins, necessitating aggressive promotional campaigns and value-meal offerings to stimulate volume growth and maintain market share.
The company also noted temporary trading disruptions due to sporadic socio-political unrest. Simbisa implemented strict cost management measures to preserve profitability amidst rising energy costs and increased Intermediate Money Transfer Tax.
“Temporary trading disruptions were also experienced due to sporadic socio-political unrest,” the company stated.
Kenya also presented a difficult trading landscape for Simbisa. High inflation, increased taxation, and job losses significantly constrained disposable incomes, leading to a 10% decline in customer counts during the quarter.
Despite a 25% increase in real average spend, revenue growth in Kenya was 13% YoY. Simbisa responded to increased price sensitivity by introducing more affordable value meal options.
The company highlighted improved gross profit margins due to procurement efficiencies and local currency stability, while operating costs were contained in line with lower customer volumes.
In Eswatini, Simbisa’s US Dollar turnover remained flat YoY in Q3 2025 and declined by 2% for the nine-month year-to-date period.
Customer counts fell by 3% in the quarter and 8% over the nine-month period, reflecting continued pressure on consumer spending due to inflationary trends and currency volatility.
Despite the weaker top-line performance, stronger operating profitability was achieved through improvements in cost of sales, productivity, and staffing structures.
Across the Group, Simbisa opened a net total of 10 new company-operated counters and added 10 franchised counters between March 2024 and March 2025, bringing the total number of outlets to 722.
The company has strategically shifted focus towards modernising its existing store base through an extensive refurbishment program, which has moderated the pace of new outlet expansion in the short term.
Looking ahead, Simbisa plans to open 4 new counters in the final quarter of FY 2025 and has an ambitious development pipeline for FY 2026, including 53 new outlets and 56 refurbishments across its markets.
The Group said it will prioritise cost-efficiency, supply chain optimisation, and building strategic supplier partnerships to mitigate the impact of sustained inflation and recent tax changes.
Simbisa also anticipates some margin relief from a strong agricultural season in Zimbabwe.
“In light of sustained inflation and recent tax changes, the Croup is prioritising cost-efficiency and supply chain optimisation. Significant efforts are being made to build strategic supplier partnerships to secure sustainable input cost savings.
“Simbisa also expects some margin relief from a strong agricultural season in Zimbabwe,” Dionisio noted.
“The Group remains committed to its sustainability objectives. As part of its environmental strategy, hybrid solar-electric systems. are being piloted in select outlets in Zimbabwe.
“Furthermore, as of February 2025, the Group completed its transition to 100% paper-based packaging.”
