Despite mounting pressure on consumer spending, Simbisa Brands Limited (Simbisa) is pushing ahead with an aggressive store rollout strategy, betting that expansion will help cushion profitability against rising operating costs and weakening disposable incomes.
The fast-food giant has 17 new outlets currently in the pipeline for its fourth quarter ending June 30, 2026, as the group moves to defend margins in an increasingly strained consumer environment.
This expansion follows Simbisa's previous warnings of softer consumer demand due to fresh local taxes introduced in January 2026, which were expected to squeeze household disposable incomes.
Despite these concerns, the company has committed US$10.64 million towards expansion and refurbishments, underscoring management’s confidence that scale and network growth remain central to sustaining earnings momentum.
This caution proved warranted during the third quarter ended March 31, 2026, as Simbisa continued to face margin pressure stemming from rising fuel prices and the impact of the "Fast-Food Tax".
These factors have added to operating costs at a time when consumers are becoming increasingly price-sensitive.
To counter the squeeze, the group has intensified supply chain optimisation and disciplined cost-management initiatives aimed at preserving profitability.
Management noted that a particular focus was placed on strategic sourcing and improving energy efficiency across all operations.
Against this backdrop, the planned rollout of new stores is shaping up to be more than just a growth strategy.
“In response to prevailing macroeconomic cost pressures, the group will continue to focus on defending margins through strengthened supply chain management, accelerated solarisation initiatives, efficiencies derived from digitisation, and the implementation of strict cost control measures,” said Simbisa CEO Basil Dionisio in the group’s third-quarter trading update.
He added that sustained top-line growth remains central to the group’s profitability objectives, with new product development and targeted marketing expected to drive performance.
The 17 new stores planned for Q4 FY2026 are expected to result in a total of 36 net new stores opened during the 12 months ending June 30, 2026.
As Zimbabwe accounts for approximately 70% of Simbisa’s business—with Kenya and Eswatini serving as other major markets—local tax increases are weighing heavily on the group.
“The solarisation programme in Zimbabwe remains a strategic priority as the group seeks to enhance energy security, reduce generator and utility costs, and future-proof operations against rising energy costs,” Dionisio added. This rollout is being pursued through strategic partnerships under a "no capex" power purchase agreement structure.
During the third quarter, the Zimbabwe store network expanded by a net total of eight counters, comprising 13 openings and five closures, ending the period with 342 trading counters. Dionisio also noted the successful launch of the Pastino brand and the refurbishment of 10 counters as part of an ongoing infrastructure upgrade.
Revenue for Simbisa Zimbabwe grew by 26% year-on-year in Q3 FY2026 to US$61.9 million, supported by a 12% increase in customer volumes and a 13% increase in average spend.
Quality improvements and value-offering campaigns contributed to growth in customer counts without requiring increases in menu pricing.
Performance in the delivery segment remained particularly strong, with volumes increasing by 83% in Q3 FY2026 compared to the prior year, supported by a growing delivery fleet and improved zoning efficiencies.
At the group level, Simbisa added a net total of 29 new counters between March 2025 and March 2026, bringing the total store network to 751 counters.
During this same period, the group delivered a 23% year-on-year revenue increase to US$85.3 million, supported by 14% growth in total customer volumes.