By Stephen Chandisareva
HARARE – Retail giant OK Zimbabwe suffered the impact of a difficult market as it reported a 32% decline in year-on-year volumes in the third quarter.
It comes as the burgeoning informal sector has engulfed major retailers in a variety of industries, including food, apparel, textiles, and footwear.
As a result, these players have called on the authorities to address the issue before it completely submerges the formerly thriving formal sector.
The market is also characterised by the continued depreciation of the local currency against the US dollar.
“Consequently, persistent price changes adversely impacted consumer demand and supply dynamics. Compliance with laws and regulations governing currency resulted in high instore prices and loss of competitiveness especially against unregulated markets.
“The Group continued to engage amicably with regulatory authorities to enhance macroeconomic stability and support the sustainable growth of formal retail business,” the company said in its trading update for the third quarter ended 31 December 2023.
Volumes, a key indicator of demand, declined by 32% for the quarter against the prior period.
In the same vein, volumes for the first 9 months fell by 28%.
“Stringent supplier payment terms on Zimbabwean dollar-denominated purchases as well as credit limitations on foreign currency denominated purchases affected stock availability and pricing dynamics during the quarter.
“The Group continues to implement volume growth strategies to stabilise business performance,” the company said.
As for financials, the group’s inflation adjusted revenue rose 50% to $568 billion while for the first 9 months it was up 57% to $1.6 trillion.
“The business has adopted a structured cost containment programme to align overhead costs with business performance,” reads the trading update.
The retail giant is positive about its prospects going forward and understands that it must change with the times to stay competitive in the market.
“The business is focusing on delivering value to its customers by enhancing customer experience, executing fair pricing, improving market presence and optimising operational efficiencies for long term sustainability,” the group said in its outlook.
OKZ closed its last trading day at $671.66 per share on the Zimbabwe Stock Exchange, recording a 3.3% gain over its previous closing price of $650.27.