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Supermarket chain in Zimbabwe takes major steps forward
Simon van Bodegraven (61) recently returned from a follow-up mission to Zimbabwe. He was previously asked to give advice on the rollout of a sustainable supermarket chain. He gave the entrepreneurs, father and son Peter and Joel Cunningham, valuable advice that was put into practice. And with result. The company quadrupled their turnover and will offer additional employment to more than 200 people in the near future.
As a very socially involved entrepreneur, Peter Cunningham supports and facilitates local farmers with their production. He also buys their fresh products and sells them to larger supermarket chains. What these chains do not take ends up in his own stores. This means that his stores could be full of fresh products one day, but remain empty another day. This “dependence” on the big chains was a big challenge.
‘You have to see, smell, feel and hear what’s going on’
Simon: “After my first mission, I had frequent contact with the entrepreneurs via WhatsApp or mail. In addition, we had monthly contact via Skype to discuss the progress that Peter and his son made and to adjust when necessary. You can give a lot of advice using the internet, but it is still necessary to experience the business live as far as I’m concerned. You have to see, smell, feel and hear what is going on. Talk to people, explore markets. ”
That is why Simon travelled to Zimbabwe again. “In April last year, on the way to the capital Harare, I ran into 33 checkpoints from the police where a ‘fine’ had to be paid here and there. This time I encountered only one checkpoint, what a difference! Once on the spot, we immediately went to the store. In the days that followed, we made an analysis and made adjustments to the company’s product assortment, presentation and pricing. The in store communication was also a point of attention. After all, Hamara is the cheapest supermarket in Bulawayo and the surrounding areas. This is something you want your (future) customers to know.
The analysis also showed that turnover had quadrupled since my last visit and that thrice as many customers find their way to the Hamara shop. In Zimbabwe, there is frequent use of taxis because it is a cheap means of transport. There is now even a line of taxis waiting outside the supermarket!
Convincing the farmers
Previously the supermarket worked with a “push system”; what was harvested came to the store or went to the big local retailers. I advised them to work with a “pull system”. This means that reliable predictions are used to determine what a customer will buy at what time. This naturally affects the entire process of the Supply Chain. The farmers must be told months in advance what they need to plant so that it can be harvested in time and will be available in the store when the customer wants to buy it. This was a new concept, not only for Peter and Joel as entrepreneurs, but also for the involved farmers. I have tried to show them how they can earn an income this way. By establishing in advance what the purchase prices will be and by guaranteeing farmers that their products will be bought, they became convinced. However, of course the continuity and quality of the products must continue be up to par. Clear agreements were made to ensure this is the case.
In the two weeks that Simon was in Zimbabwe, he and entrepreneur Peter together with his son Joel wrote a two-year business plan for the entire retail organisation. This business plan consists of a commercial plan, an investment plan and a step-by-step plan. Simon: ‘We have calculated various scenarios and tested them financially. In addition, more than 250 products will be added to the product assortment. In a few months, the supermarket organisation will be expanded with three or four new branches. This creates employment for more than 200 employees at the head office, at the farms, in the supermarkets, in short the entire Supply Chain will benefit ‘.
Simon: “So much can be done, we are just starting!”
A big changeover
Entrepreneurs Peter and Joel Cunningham are bursting with energy. In addition to keeping busy with all the new implementations and plans that still need to be rolled out; they are also focussing on sustainability. For example, in one project the farmers use solar energy instead of aggregates.