Own Correspondent 

CAPE TOWN – South African retail giant Pick ‘n Pay says it suffered heavy losses on its Zimbabwean operations during the half-year to August, forcing it to write off its investments in the struggling southern African economy. 

Ongoing economic problems in Zimbabwe erased a comfortable R23 million profit earned by the group from its Zimbabwean investments during the comparable period last year, forcing the retail giant to write off income from the country for the six months to August. 

Pick ‘n Pay chairman Raymond Ackerman said although his company's stores in Zimbabwe were operating well, the South African group was expecting no income from there during the first half of the year. 

Pick ‘n Pay has a stake in one of Zimbabwe’s leading retail chain, TM Supermarkets. 

TM Supermarkets is among several Zimbabwean businesses negatively affected by a hostile operating environment in the country, largely blamed on a plethora of populist economic policies and ill-conceived political decisions. 

These include a controversial price freeze imposed in June when President Robert Mugabe ordered companies to slash prices by half. 

Authorities followed the price freeze with a blitz on manufacturers and retailers, forcing them to reduce prices and arresting those who refused to comply with the directive. 

The government price freeze came against the backdrop of spiralling inflation, now standing at a world record 7 982.1 percent. 

Urban Zimbabweans, most of them at the receiving end of a severe economic crisis, responded to the price freeze by going on a buying spree that left supermarket shelves empty. 

Mugabe has blamed the business sector of working with former colonial power Britain by unfairly hiking prices to fan anger among Zimbabweans to force them to rise against his government. 

The operating environment has also worsened in the past two months following the passing of a controversial economic empowerment Bill that would force foreign companies to cede 51 percent of their shareholding to indigenous blacks. 

Shortages of foreign currency have also made it difficult for companies to operate at full capacity, creating problems for the retail sector when it comes to restocking their businesses. - ZimOnline