Simbisa battles mounting margin pressures amid fuel, tax squeeze
CLOUDINE MATOLA
Publicly traded fast-food giant, Simbisa Brands Limited, is battling mounting margin pressures from rising fuel prices and tax changes, prompting the group to accelerate supply chain efficiencies and energy-saving initiatives to safeguard earnings, Business Times can report.
Group chief executive officer Basil Dionisio said the company continues to face significant cost headwinds following fuel price increases linked to global geopolitical tensions, as well as the impact of the Fast Food Tax introduced at the beginning of 2026.
“Simbisa Zimbabwe continued to experience margin pressure arising from fuel price increases and the impact of the Fast Food Tax. Supply chain optimisation and disciplined cost management initiatives are being implemented to preserve profitability, with particular focus on strategic sourcing and improving energy efficiency.
“The quarter under review was, however, characterised by heightened cost pressures following significant increases in fuel prices from February 2026, driven by global oil supply disruptions associated with ongoing Middle East tensions. In addition to increasing operating costs, these developments have also negatively impacted gross profit margins as suppliers adjusted pricing in response to inflationary pressures. The Group has intensified its focus on managing inflationary cost pressures in order to preserve margins and safeguard long-term profitability,” Dionisio said.
To counter rising operating expenses, Simbisa is accelerating its solarisation programme, which management views as a critical pillar in enhancing energy security and reducing reliance on costly generators and grid electricity.
Dionisio said the initiative is being implemented through strategic partnerships under a no-capital-expenditure Power Purchase Agreement (PPA) model, enabling the group to expand renewable energy usage without placing additional strain on its balance sheet.
“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. Rollout continues to be pursued through strategic partnerships under a no-capex Power Purchase Agreement structure,” he said.
Beyond cost containment, Simbisa is also focusing on sustaining revenue growth through new product development, targeted marketing campaigns and strategic promotional activities aimed at driving customer traffic and spending.
The strategy appears to be yielding results, with the group recording a 23% year-on-year increase in revenue to US$85.3m during the third quarter ended March 2026. The growth was supported by a 14% rise in customer volumes to 16.3m transactions and an 8% increase in average customer spend to US$5.23.
The group also continued to strengthen its market presence, adding 29 new counters between March 31, 2025 and March 31, 2026. This brought its total network to 751 counters, comprising 621 company-owned outlets and 130 franchised operations.
Despite the challenging operating environment and persistent margin pressures, Simbisa remains firmly focused on expansion.
The company has 17 new stores in the pipeline for the final quarter of the 2026 financial year and expects to open a total of 36 net new stores by June 30, 2026.
“The Group continues to expand its footprint, with 17 new stores currently in the pipeline for Q4 FY2026. This is expected to result in a total of 36 net new stores opened during the 12 months to 30 June 2026,” Dionisio said.
