South African retail giant Pick n Pay has taken a significant hit on its investment in TM Supermarkets, citing Zimbabwe’s deteriorating economic climate as the primary factor. The company, which holds a 49% stake in TM through a joint venture with Meikles Limited, has written down its investment due to the country’s hyperinflation, erratic currency rates, and mounting economic instability.

The economic challenges have severely impacted formal retail operations in Zimbabwe, driving up operating costs and squeezing consumer spending power. As a result, shoppers are increasingly turning to cheaper, informal alternatives and smuggled goods, leaving TM Supermarkets struggling to maintain profitability. This shift has had a devastating impact on Pick n Pay’s share of TM’s earnings, which plummeted to zero for the reporting period, down from a R44.1 million (US$2.48 million) profit in 2023.

The write-down raises concerns about the future viability of Pick n Pay’s continued investment in Zimbabwe’s challenging market. The move may signal a broader retreat of foreign investors from the country, exacerbating economic woes.