Pick n Pay’s 50% discount for USD: killing the black market without an SI

Valentine Muhamba Avatar
TM Pick n Pay, discount

TM Pick n Pay is giving a 50% discount for goods bought in its store in USD. I first noticed this when I was at Pick n Pay Westgate and saw the 50% discount sign on the exchange rate noticeboard. I asked the till operator and was told that I would get half off if I was paying in United States Dollars.

Now, this is one of the more adventurous ways in which a company has gone about looking for hard currency. Zimbabweans generally don’t want to give up their hard-earned USD and this is an enticing offer because essentially it’s cheaper than going to a money changer in both the conversion rate, resources spent in fuel or bus fare, bank charges when making purchasing in the store and most importantly time.

This means that if you are still giving away money to a money changer at whatever rate they’re charging these days, you are doing yourself a disservice. It is much simpler and cheaper to just go and hand over that money at the till. What Pick n Pay is doing is essentially what SI 127 of 2021 failed to do, to get people to transact with USD away from the parallel market.

So why is TM Pick n Pay willing to lose half to get your USD?

To be honest, I don’t know for certain. However, what I can say is that he/she who controls hard currency has leverage. For a company like TM Pick n Pay, it can get resources like fuel and cross border purchases for stock they can’t get locally much easier. The problem that I can’t reconcile is why they would be willing to shed 50% of what they would make in order to get mattress bankers to pay in USD.

What I mean is that there is surely a point they will start to incur losses unless if they have been ridiculously marking up prices and everything is rosy even with the 50% discount. There is, of course, speculation but it’s hard not to speculate because it looks to me that Pick n Pay might be building forex reserves. But what the reserves could be for is hard to pin down.

What about the aforementioned SI 127 of 2021

One of the provisions of Statutory Instrument 127 of 2021, be it the original form or amended for after outrage, was that companies trading on the Reserve Bank of Zimbabwe’s Forex Auction should not offer a discount to entice their customer to pay for goods and services in USD or any other foreign currency.

“A natural or legal person shall be guilty of a civil infringement if he or she sells, displays or offers goods or services for sale at an exchange rate above the ruling exchange rate, or imposes (for the predominant purpose of encouraging payment in a foreign currency) a premium on Zimbabwe dollar payments or allows a discount on foreign currency payments”

SI 127 of 2021

This rule, as previously alluded to was later set to apply for companies that traded on the Forex Auction not the rest of Zimbabwean businesses who don’t have access to the system or want to wait in the central bank’s backlog queue for USD.

“The Bank’s efforts to foster compliance in terms of SI 127 shall be limited to outliers that wantonly abuse the foreign exchange auction system, exchange rate manipulation and noncompliance with anti-money laundering rules and regulations. The Bank’s focus on these key areas, coupled with business’s reality check, self-discipline, self-monitoring and peer-review, will sustain inflation and exchange rate stability that are necessary for the economy to continue to rebound.”

RBZ’s SI 127 Compliance Update 15/06/2021

On to this point, it appears that TM Pick n Pay nor its holding company Meikels Limited are listed on the list of beneficiaries for the forex auction. This means that for all intents and purposes there is nothing wrong going on here…

The govt can’t really complain

ZIMRA is already collecting taxes for anything USD related, so this is a win for the govt as much as it is for the shopper. Moreover, TM Pick n Pay is issuing receipts for these purchases in USD… What remains to be seen now is how long Pick n Pay can continue to hold this discount up before it starts to hit their books hard…

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What’s your take?

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  1. Lovemore

    To what extent is this going to affect the black market exchange rate and how???

  2. Barf!

    Hardly unexpected! No thanks to vote rigging, general voter apathy and stupid, greedy idiots who will move the universe to retain their single seat in parliament, this situation was inevitable! One day, although it’s anyone’s guess as to when, there might be credible, viable opposition to zpf, enough interest in voting for change, and there won’t be some stupid, greedy idiot mouthing off about not being allocated a seat…

  3. Anonymous

    Its only for the festive season and do note that in January 2022 they will get first preference for forwx allocation. So this tome aeound they get more sales to pay bonuses expenses etc. Simple business

  4. Hugh Jarse

    This isn’t the first time something like this has happened! Several shops offered substantial “discounts”, for those paying in usd, dating WAY WAY back! Wonder when the next 100 trillion note will appear…

    1. Unpleased Customer

      Indeed indeed. There is a catch there. The last time I checked a lil while ago this December, the RTGS prices in one TM PicknPay Store were significantly inflated. I thought that it was ridiculous given that smaller retail outlets offered more reasonable prices on certain goods.

      It only gets clearer now. It’s a measure to subvert any tradeoffs e.g. decrease in revenue per sale, while enticing customers with a fallacious discount. It is not really much of a discount, in my opinion. It’s marketing gimmick designed to attract attention.

      It seems several other businesses are in the habit of offering these pseudo discounts. For example I know of a certain hobbyist electronics components store in Zimbabwe is doing a similar thing with their Festive Season 50% discount. They simply inflated their prices almost twice-fold. Then they claimed to be offering a huge discount, when in fact they know that we would be offering them their rightful dues, what they have been getting all along.

      I don’t know if I should call this price unscrupulous or ingenious. But I gravitate towards the former. I also wonder if customers really fall for these pseudo discounts…

  5. Brinso

    Vote ZANU

  6. Anonymous

    Official rate = $110 per dollar
    50% discount means effectively the rate is circa $200 per dollar.

    1. Peter Moyo


    2. G

      It’s more like a 50% on the rate so you pay 160ish.

    3. Anonymous

      This is true, it wilk be around 165 so they are simply buying forex to import their goods conveniently and reliably at a cheaper rate than the 200 at the black market

  7. Anonymous

    This will not affect their books at all cause the discount offsets the difference in rate between official and black market. At the end of the day, if we factor in the discount, TM is now adopting the parallel market rate…

    1. G

      Spar have done this for a while. But the discount makes the rate 160 something, not 200. It’s more like an additional 50% to the rate.

    2. i10

      When you own a store & making a profit of US$50 000 per month and you truly want to change things in your country you talk to every customer u have to pay US$5 upfront per month, when you have at least
      10 000 customers you should be able to make
      US$50 000 per month.Now it will be easy to drop the prices down, if bread was Z$150 you will notice that the owner of the store will be forced to lower the prices it is possible to revert to
      US$1 is to Z$1 (RATE) trust me it is working.#PROMOTE ZIMDOLLAR

  8. The observer

    The way I see it if you are buying in usd the rate in store is around 107zwl to usd the street rate is around 200zwl to usd so if you buy good worth 1000zwl in pick n pay its equivalent to about 10usd but if you use the street rate its equivalent to 5usd so pick n pay then give you 50% discount then you essentially pay the same amount you would have paid had you gone to the streets to get your ZWL… They are just trading with the rate as the streets.

  9. Wenyasha

    It’s not 50% discount mudhara imatha …those guys are not loosing anything…..check properly

  10. Mrs Sarah Meyer

    Registration for your mailing list only.

  11. ngoni samuel Mamvura

    Strategy…Its all about the volumes and like you said Tm/ PnP has 52 in Zimbabwe , so if they manage to collect 20 000usd per day per shop thus 1milion per day * 7 days =7mil in USD that they could be getting weekly .If you read the history of the PnP family you will surely get to understand that they are strategist

  12. Ruf

    They not loosing anything…the RTGS price is way inflated even you use the black market rate…that’s where the arbitrage comes. If you use a runner it’s fine to eat less in USD terms. Please do a comparison of prices between stores first esp for imported items

  13. Simon K

    Payments in RTGS in shops are now painful… Prices are inflated such that you feel more comfortable to buy USD in the street in order to buy goods at tuckshops whose prices in usd are more favourable

  14. Jonso

    I am sorry at Techzim you got it wrong. Yes they are offering a rate at the moment its 163 to the dollar. Both at TM and Ok. But did you take note of their prices for goods. All their products are priced at 200 to 230 to the dollar. For instance Cooking oil 2L is ranging 640RTGS which is $4. That is fraud because outside these shops those selling direct in USD in smaller shops its going for $2.50 – $2.80. Black market rates on offer are ranging between 175 and 200. Only if they price their products correctly to the USD is it a bargain

    1. i10

      USD is just killing your currency as Zimbabweans.

  15. Chitatu

    Quite correct, Jonso. It cannot be described as a 50% discount because today my ZWL 12825 cost me US$ 78.69 (12825/162.99) instead of USD$ 58.37 (12825/2*108.66). They are converting their stated USD rate with a multiple of 1.5 i.e. adding 50% to their stated USD rate. They need to correct the lie and state truthfully their so-called discount policy.

    1. Clemence

      You are right there. I bought a few items at RTGS1445. US$10 could not pay for that. Their 50% discount is just fake!

  16. Unnamed.

    Not at all what it seems….what Pick e Pay give you is the official rate of 108 plus 50% which makes it 162 to 1 usd. No where near the real market rate of 200/210.
    Do your maths before you fork out usd to them!!

  17. Enk

    I don’t think they’ll have any loss considering when you convert their products prices using black market rates they’re almost the same with those offered by informal traders who charge USD. And the other thing is that they might have the similar arrangement with their suppliers and patners

  18. Dhuterere

    We have Professors who lobbied for our Zim Dollar currency yet behind the back they salivate for the USD so how do our currency stabilize when both the gvt and its citizens have an insatiable appetite for the greenback…

  19. BEIT

    The discount theme is a fallacy. I suggest one sticks to theirs when they can, and if they have a premium FX dealer, oh well, that’s nice too. Otherwise 50% kubatwa kumeso

  20. Marilyn Baxter

    Their effective rate today 160 .. 50% added to official rate? Not sure how that equates to a discount. Certainly most misleading.

  21. Joanes

    It’s confusing