The black sheep of Pick n Pay nobody is talking about

TM Supermarkets, a retail chain co-owned by Pick n Pay that operates in Zimbabwe, has gone from exceptional growth to severe financial impairment over the past decade.

Since 2016, Pick n Pay’s investment in this retail chain has gone from bad to worse, with the group having impaired its investment in TM Supermarkets to zero in 2024.

Long before Pick n Pay came into the picture, TM Supermarkets was born out of the Meikles Group, a huge Zimbabwean conglomerate founded by the Meikle brothers in 1892.

In post-independent Zimbabwe, the Meikles Group established its dedicated grocery retail arm, TM Supermarkets, named after Thomas Meikle.

Soon, this retail arm came to dominate the Zimbabwean market, becoming the country’s largest retail chain by store count, with its footprint spanning rural towns and major cities.

Looking to expand its geographic footprint outside South Africa, Pick n Pay became involved at TM Supermarkets in 1996, purchasing a 25% minority stake.

At the time, Pick n Pay was still under the leadership of the late retail legend Raymond Ackerman.

For the first few years, Pick n Pay’s investment in TM Supermarkets was largely passive, with the retail chain continuing to operate independently under the Meikles Group’s management.

At the turn of the century, TM Supermarkets boasted 49 stores across Zimbabwe.

However, disaster struck in the years to follow, as Zimbabwe’s economy essentially collapsed amid hyperinflation and severe socio-political turmoil.

By mid-2008, Zimbabwe’s inflation hit an estimated 231,000,000%, and the country’s currency was essentially rendered worthless.

While many other smaller retailers were forced to shut their doors under these conditions, TM Supermarkets managed to survive, buoyed by a lifeline from Pick n Pay.

In 2009, Pick n Pay’s investment in TM Supermarkets became far more active, with the retailer sending a large influx of capital and stock from South Africa to keep the retail chain afloat.

Pick n Pay saves the day

With TM Supermarkets in desperate need of help, Meikles and Pick n Pay renegotiated their ownership stakes.

In 2010, Pick n Pay invested a further $13 million to increase its stake to 49%, while Meikles retained a 51% controlling interest. This was to comply with Zimbabwe’s strict Indigenisation and Economic Empowerment laws.

With its larger stake secured, Pick n Pay assumed a more active management role in TM Supermarkets, using the lessons it learned in South Africa to turn around the Zimbabwean chain.

In line with its more active role, Pick n Pay launched its flagship TM Pick n Pay store in 2012, as part of a large rebranding campaign.

Pick n Pay’s efforts paid off handsomely. By rolling out Pick n Pay-branded stores and increasing the presence of its own-brand products, the business achieved strong volume and customer growth.

This partnership was also mutually beneficial, with Pick n Pay’s share of TM Supermarkets’ income growing by 150% in 2016.

Between 2016 and 2018, TM Supermarkets continued to go from strength to strength, with the retailer recognised with a number of awards from the Confederation of Zimbabwean Retailers.

In 2016, TM Supermarkets received the awards for Best Retail Branch Network and the Consumer Choice award as Zimbabwe’s Supermarket of the year. By 2018, TM Supermarkets had 57 stores across Zimbabwe.

However, things took a turn in 2019, when Zimbabwe’s operating environment deteriorated, with market players facing currency shortages and devaluation, high inflation, and water and fuel shortages.

This resulted in painful impairments and foreign exchange losses for Pick n Pay. In 2020 alone, Pick n Pay impaired the value of its investment in TM Supermarkets by R173.6 million, bringing the carrying value down to R50.4 million.

Despite this, the retailer held out hope that TM Supermarkets could be saved, and there were some positive signs to support this view.

In 2021, Pick n Pay reported that TM Supermarkets was entirely self-funding and required no additional capital investment. It had also settled its outstanding trade debt with Pick n Pay in full.

A year later, Pick n Pay was able to increase the fair value of its investment in TM Supermarkets to R106 million, with the company reporting that the Zimbabwean retailer had high levels of business liquidity and minimal exposure to foreign-denominated debt.

In the years to follow, TM Supermarkets also successfully remitted dividends to South Africa, paying R20.1 million to Pick n Pay in 2022 and R16.0 million in 2023.

Down to nil

However, optimism surrounding TM Supermarkets’ success plummeted in 2024, when the Zimbabwean economy worsened, and TM reported an underlying loss of R37.6 million.

This saw Pick n Pay impair its investment in TM Supermarkets to zero, recording an impairment charge of R253.6 million.

The write-down of its investment also meant that Pick n Pay stopped recognising its share of TM Supermarkets’ ongoing losses on its balance sheet from 2024 onwards.

Pick n Pay only reported an unrecognised share of associate losses of R51 million in 2025 and R37 million in 2026.

It has also not reported any dividends received from TM Supermarkets after 2024.

Despite its financial difficulties, TM Supermarkets still has a relatively extensive footprint, with 73 stores across Zimbabwe in 2026. Notably, this is down from 74 in 2025.

TM Supermarkets’ challenges are not an isolated event, with many Zimbabwean retailers struggling to stay afloat amid the country’s extremely difficult trading conditions.

Recently, it was revealed that OK Zimbabwe, which was started in 1942 and dominated retail in the country for years, was in such financial trouble that it could not pay its employees.

In Pick n Pay’s latest annual results presentation, CEO Sean Summers, who is currently serving his second tenure at the helm, said TM Supermarkets is not immune to Zimbabwe’s worsening trading conditions.

He explained that, during his first tenure as CEO, between 1999 and 2006, OK Zimbabwe was a “10 tonne gorilla”, but now it faces collapse.

Therefore, Pick n Pay’s Zimbabwean operations should not be seen as immune either, he said.