Oliver Kazunga, Senior Business Reporter
LISTED quick service business, Simbisa Brands, has set the pace by slashing prices of its major products by 20 percent margins in response to monetary and fiscal consolidation measures being implemented by Government to stabilise the economy.
Finance and Economic Development Minister, Professor Mthuli Ncube, recently predicted that prices of goods and services would start falling this month largely underpinned by the reforms introduced under the Transitional Stabilisation Programme (TSP).
Simbisa Brands, Zimbabwe’s leading quick service business which owns Chicken Inn, Pizza Inn, Bakers Inn, Haefelis, Creamy Inn, Steers, Nando’s and Fish Inn, yesterday announced a 20 percent price reduction on some of its major products.
For example, at Steers, mega rib, which previously was going for $110 is now pegged at $88 while King Steer burger, which was previously pegged at $40 is now being sold for $32. The price of a quarter chicken and chips has been slashed to $28 from $35.
At Creamy Inn, a large milkshake, which was previously sold at $22,50, is now pegged at $18 while a regular cup, which was being sold at $8, is now pegged at $6,40.
A chicken burger, which was previously being sold at $17,50 at Chicken Inn, is now going for $14 while a two piecer meal, which was selling for $25, is now $20. The price of a bucket meal has been reduced to $60 from $75.
At Pizza Inn, the price of a medium classic pizza has been slashed to $32 from $40 while a large classic pizza is now selling for $48 from $60. A mega classic pizza is now going for $72 down from $90.
A cake slice, which was previously pegged at $10 is now going for $8 at Haefelis while the same outlet has also reduced the price of Colcom breakfast from $30 to $24; chips (small) from $10 to $8, and a ¼ chicken from $22,50 to $18.
More businesses are expected to reduce prices as the local currency regains footing following the scrapping of the multi-currency system last week. However, some products at Bakers Inn have remained unchanged like steak pie ( $4), and Russian hot dog and roll at $6.
A reduction in prices means the runaway month-on-month inflation rate, which had become a common characteristic, will now be tamed and consumers will have more disposable incomes and thus increasing aggregate demand.
This again entails that the manufacturing sector will have to increase their competitiveness in terms of production levels to match with local demand.
In recent months, prices of goods and services in the formal market were spiralling upwards largely triggered by the parallel market exchange rates. The Zimbabwe National Statistics Agency has said the country’s month-on-month inflation rate increased by 7,02 percentage points in May to 12,54 percent from 5,52 percent in April.
As measured by the all-items Consumer Price Index, this means prices increased by an average rate of 12,54 percent from April 2019 to May 2019. As part of efforts to bring sanity into the economy in line with the TSP, the Government last week outlawed the use of the multi-currency system through new regulations that compelled the use of local currency in all forms of transactions within the country.
Through Statutory Instrument (SI) 142 of 2019, the Government abolished the use of the British pound, South African rand, Botswana pula, and any other foreign currencies, as legal tender.
The move has also seen the interbank market exchange rate surpassing the black market exchange rates as banks are now offering more in local currency for those exchanging their forex.
Going forward, it is anticipated that there will be continued pressure for prices to come down as the Reserve Bank of Zimbabwe will also move in to support bureaux de changes so that they can operate efficiently and effectively. — @okazunga.