HomeBusinessSimbisa Brands implements two-tier pricing model

Simbisa Brands implements two-tier pricing model


ZIMBABWE’s largest fast food chain, Simbisa Brands Limited (SBL), says it will implement a two-tier pricing model, offering discounts for customers paying in United States dollars as it tries to raise foreign currency required to pay royalties for the foreign franchises it operates.


The model, which has been adopted by mostly smaller informal retailers, will see discounts for customers using the United States dollar, while those using real time gross settlement balances (swipe), mobile money or bond notes will be charged a different price.

A 500ml bottle of water will cost $1,50 in local money or US$0,50. At Bakers Inn, one of the brands operated by SBL, a quarter chicken has been priced at US$2 or $7 in local currency.

The trend is a practical reflection of how the bond note and RTGS have lost value contrary to government insistence that they are at par with the greenback.

“We need something like $1,2 million in hard currency every month, but on average we are only managing about $100 000, so we need the foreign currency to meet our obligations. This is why we have introduced discounted prices for those paying in hard currency, which is even cheaper than what it is in South Africa to our clients. We are simply asking our clients to be able to support to get the forex we need,” chief executive Warren Meares told NewsDay yesterday.

“The Reserve Bank of Zimbabwe has not been giving us any forex, so now we have to raise our own forex to meet our costs. Right now the priority is fuel and flour.”

He said prices in United States dollars were at below cost when compared with prices in South Africa, but admitted they had increased prices at least four times this year.

SBL has a total of 211 restaurant outlets across the country, employing 4 000 people serving 4,5 million customers a month.

It operates Chicken Inn, Pizza Inn, Baker’s Inn, Creamy Inn, Fish Inn, Rocomamas, Steers, Nando’s, and Galito’s.

“The import duties and taxes on imported raw materials also now have to be settled in foreign currency. Due to the prevailing national circumstances, all our bankers are failing to provide us with foreign currency at the regulated exchange rate of 1:1 between US dollar, and local dollars”.

In the 2019 National Budget presented last month, Treasury introduced a list of goods that will require duties to be settled in forex, which include cheese and cold meats; key inputs for Simbisa.

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  1. this blatant profiteering and these shops must do the honorary thing and close or the government must take stern action against these blatant lawbreakers

    • you very foolish, these guys need foreign currency not bond notes for raw materials. Companies are struggling to keep people employed in this sick economy and yet you think its profiteering.

  2. This is no longer about making a profit Anonymous, it’s about staying in business. Inputs are not available locally so have to be imported, banks cannot supply foreign currency so product has to be charged for in foreign currency in order to import the inputs. Shutting the business down would mean another 4000 people unemployed, how would that help? This is not business’s fault, this is government economic mismanagement…

      • Anonymous clearly has no insight into the Zimbabwe situation. You need a thorough lecture which can’t be delivered on this platform. In a nutshell, there is a justifiable need to charge in USD…the alternative is to close shop, send 4000 employees home. The multiplier of that will affect over 20 000 people. Gvt has failed to sustain business and business has to find ways to survive. This is one of the ways. Profiteering is a wrong term altogether. The term clearly makes you feel learned which isn’t right.Business needs to be decisive. All the best to Simbisa.

        • Business is about finding alternative sources of supply of materials and thinking out of the box. Simbisa must switch to local raw materials using different formulae for their products. Forget about foreign franchises and come up with alternative local products which do not require forex. Closing shop and sending 4 000 employees home is pure blackmail by any business in Simbisa’s situation. Ceasing to operate would also prove lack of strategic thinking on the part of Simbisa shareholders and management in the light of the forex bind.

          • The Commerce Industry must not be reserved when it comes to policy making- they let politicians determine the way when the implication has magnitude contribution to the fall of the progress and market.
            Now that everyone expect services from them, what good is left to deliver

          • If you’re such a thinker then go ahead and use local raw materials and ingredients. Exemplify the strategic thinking you’re talking about because all companies in Zimbabwe seem to be seriously deficient of Strategic thinking according to you. You will realise that companies that are not dollarising will be in serious trouble come this 2019. The fact of the matter is that we need import content in our production. If we can source locally, happy days but we have a significant content in different sectors including agriculture.

        • agreed, anonymous seems not to appreciate the non convertibility of bond /rtgs.in fact the duo is money simply because they are legal tender…otherwise the fail in all measures of good money…store of wealth, stability,general acceptability etc..

  3. Those who are trying to knock some sense into the newt calling itself eliasha are wasting their time. His IQ is less than 1, he has a grenade for a brain…and what comes up comes out!

  4. Tapinda busy, everyone is charging in US$ and no one is paying the same currency. Two-tier pakudii ingotii maakuda US$ chete. Maitiro enyu emakore ese, gaining when everyone is losing.

  5. Correct as it sounds…but how do you justify the increase for the Bond prices they were already charging? A 46% increase on the price of 2-peicer for example, in bond terms!! Come on

  6. Anonymous how are the workers to be paid in US dollars if the product is not sold for US dollars?
    Mageja Sibiza what planet are you living on? There are no local alternatives… wheat, soya beans, peanuts are being imported because there isn’t enough local production! Simbisa is trying to avoid closing down… Anonymous thought that closing would be the ‘honorary’ thing to do…

  7. There is normal thinking, then there is Zanu thinking, I am sure that there are people at Zanu of headquarters who are paid to read papers and comment in favour of governments failed policies.

  8. Bottled water at US$50.00 when in retail supermarkets it is going for $1.00 bond, and you call this a discount.GOD forbid.

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