KFC suspends Zim operations

12 Oct, 2018 - 11:10 0 Views
KFC suspends Zim operations

eBusiness Weekly

HARARE – Popular fast foods outlet, KFC  on Thursday said it had suspended operations in Zimbabwe due to the  volatility of the foreign exchange market in the past week which has  badly affected business.

The upheaval in the foreign exchange market was triggered by last  week’s  Monetary Policy statement by the Reserve Bank in which major changes  were  announced.

This drove up rates on the black market, a major source of foreign  currency  for most firms in the country as the economy faces shortages.

While the official exchange rate for the United States dollar against  the local bond note remains pegged at 1 to 1, it shot to as high as 1  to 5 after last week’s announcements that separated bond note bank  accounts from foreign currency accounts.

This resulted in a spike in the prices of goods and services across  the board, with some in the fast foods sector players such as the  Simbisa Brands subsidiaries Chicken Inn and Slice Inn, hiking prices  by nearly 100 percent.

But KFC Africa said it had taken the decision to “temporarily close  our restaurants in Zimbabwe as we are unable to continue to trade due  to the current pressure on Zimbabwe’s economy.”

“The currency challenges have affected our operations and supply and  we are exploring various ways to open our restaurants soon.”

KFC re-entered the Zimbabwean market four years ago and was operating  six outlets in the country, four in the capital Harare, and one in  Bulawayo and in Victoria Falls.

But KFC is not the only player to suspend its operations due to  the current unpredictable trading environment.

Another high end restaurant chain, St Elmos, had a day earlier also  announced  suspension of its operations.

“Unfortunately we are unable to source stock unless we pay suppliers  in US dollars,” the chain said, adding “we will hopefully open as soon  as possible.”

The foreign currency shortages have had a cross sector impact. – New Ziana

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