HomeBusiness DigestMeikles Stores weathers storm

Meikles Stores weathers storm

FIDELIS Goredema (FG) was recently appointed CEO for Meikles Stores, having served the group since Zimbabwe gained independence in 1980. The Zimbabwe Independent chief business reporter Paul Nyakazeya (PN) this week spoke to Goredema about how the retail industry has changed over the past three decades, challenges retailers face and the future of the sector in Zimbabwe.

PN: You have witnessed three very different decades in Zimbabwe’s retail industry, how do you summarise your experiences?

FG: The terms bumper harvest, commodity prices, drought, food for work, shortages, Esap, Merp, inflation, quadrillion, and I could go on, have special meaning for our industry and for Zimbabweans generally, because for us they determine  turnover and therefore have the power to make or break us. Over the years we have seen times of both boon and doom. Certainly, if you had told me two years ago that we would be having this conversation today with container loads of stock on the way, I would have concluded that you had taken leave of your senses.

PN: The Central Business District (CBD) was shifting northwards at some point, but then began to die, then transform, yet your stores remain in the heart of the CBD; who is shopping in your stores?

FG: Every country and city has its own retail history and experiences; our shopping history is a derivative of the British model which is focused on the high street model, as opposed to the American and now South African model which adopts a shopping mall format. The profile of our city centre shoppers has not changed much, although I will concede that the opening of Borrowdale Barbours in Harare was an attempt to cater for the northern suburb shopping mall shoppers, who found it almost impossible to enter the CBD for want of fuel and secure parking facilities, et cetera. City centre revenue is drawn from customers from Harare and its environs, including high density suburbs, shoppers who realise that the trip is worthwhile to secure merchandise that does not date and merchandise with a Meikles quality guarantee. Our experience shows that the feet follow quality, wherever it may reside. The quality stock and credit combination is a powerful duo, when complemented by seasoned and knowledgeable customer service staff. Speaking of shopping malls, and I should hasten to say that I am neither an  economist nor town planner, but it appears to me that for now we do not have the liquidity and income levels to sustain a shopping mall culture.

PN: Where does your stock come from, and what target market do you have in mind?

FG: Galleries Lafayette in Paris, France, where your net worth is derived from the shape and size of the limousine you arrive in under the covered entrance, is not the benchmark, neither is Sandton City, closer to home in Johannesburg, South Africa. But we certainly want to see the return to our fine stores of the buzz and hype, offering the choice customers wish to see, which hopefully removes the need for external shopping trips, other than for specialised goods. There is a lot of money leaving the country to chase merchandise in stores outside Zimbabwe; we are positioning ourselves to keep that spend here. Traditionally our buyers travelled the world over to secure the best stock for our customers; at this stage liquidly issues and experience has forced us to zero in on a number of sourcing hubs, largely in the East.

PN: You refer to seasoned staff but skills flight is a term that has assumed special meaning in Zimbabwe. How have you been able to retain staff given the pressures of the past few years?

FG: A total of 460 people across seven stores translates to a heavy wage bill. Our diversified conglomerate structure assisted us to structure creative solutions for staff retention, but we were not spared by the allure of the Diaspora and lost a good number of people at all levels. The number of departments we have in each store demands that we employ people who display high levels of enthusiasm and versatility. The discerning customer, who pushes the biggest chunk of our turnover, has an expectation to be served by knowledgeable versatile staff, and to that end we undertake training and re-training of staff in key customer facing areas — in case you have not heard, the customer is king, again!

PN: Where is the retail industry going in Zimbabwe; and related to that, what is the fate of the local manufacturing industry?

FG: We work closely with a number of local manufacturers with whom relationships have been cultivated over many years and with whom quality standards have been established over a long period of time. When their stock comes in store, it does not stay; our customers know and love their products. Here I am referring to the likes of Michelle Fashions, Escapades, Van Heusen, Dori and furniture gurus Adam Bede, just to name a few. These guys continued to defy the odds and innovate around our specifics challenges to consistently provide a quality product.

PN: How, if at all, have cheap products from countries such as Nigeria and China affected store operations and turnover?

FG: Most people aspire for the good things in life and the question we must ask is “did Zimbabweans like making cross-border shopping trips?” The responses will be mixed, but where there is consensus is that we were exposed to choice, quality and service during those trips. 
Zimbabwe is a highly formalised and comparatively sophisticated market, where consumers generally want to spend their hard earned cash on quality, in the form of recognised or tried and tested brands, and where they have recourse should products not live up to purchase promises. Not all retailers can offer this, neither can they provide stock of the range and depth players of our size can.

There is a perception that the Meikles Stores are exclusive. From a quality stand point, we do not compromise.  But we would like to be able to say that we serve Zimbabweans from all walks of life, by providing great merchandise at reasonable prices, on credit.

Having said this though, the model employed by smaller operators should not be underestimated, it has its market and enjoys steady turnover, especially at month end, given that it is cash-based.

Their overheads are generally more modest for a variety of reasons, and therefore their pricing is finer, so for the bargain hunter, in an environment where money remains tight, we are alive to the fact that one is justified in going beyond our high street stores in search of savings of several dollars. 
But because we are an everyday business, and a credit business, our planning tends to focus more on how we can meet customer needs better, especially those still serviced by these newer smaller players, so that they too migrate up to the departmental store experience.

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