Meikles Limited sees increase in sales

MEIKLES Limited saw a five percent increase in goods sold in its retail outlet in the three months to November while customers increased by two percent in the same period, the latest data shows.

In a statement accompanying the company’s third quarter trading update, Meikles Limited company secretary Thabani Mpofu said the percentage of revenue received in foreign currency during the quarter and the nine months to date was below 20 percent despite an improvement from the prior year.

“Units sold and customer count increased by five percent and two percent respectively, for the quarter compared to last year.

“The decline in units sold for the nine months eased to six percent from the 10 percent reported for the six months to 31 August 2023,” said Mr Mpofu.

On the decline of revenue to below 20 percent, Mr Mpofu said this fell far short of the average of 80 per ZimStat’s consumer survey findings, primarily due to compliance with the in-store exchange rate policy.

“The in-store exchange rate policy remains an albatross on formal retail in attaining the dollarisation level reached by most businesses in the economy.

“This creates ongoing supply chain challenges as suppliers are invoicing in USD and prefer settlement in USD. The stores were relatively well stocked, hence the growth in units sold and customer count,” he said.

Established businesses are required by the Government to sell their products using an official exchange rate with an added 10 percent forward pricing.

This has seen customers preferring to buy mainly using local currency rather than USD, which they sometimes take advantage of the parallel market rates and buy local currency to use on those shops that use official rates.

Therefore, established businesses receive much of their revenue in local currency, with few in foreign currency.

On the hospitality front, room occupancy grew by five percentage points to 42 percent for the quarter from 37 percent achieved last year.

“The average room rate, in USD terms, was 13 percent above last year and, combined with the growth in room occupancy, resulted in a 29 percent growth in revenue per available room. Revenue per available room rose by 50 percent for the nine months to 30 November 2023 due to a room occupancy growth of ten percentage points and a 12 percent increase in the average room rate,” he said.

Meanwhile, Mr Mpofu said the group revenue for the quarter under review of $613,1 billion was 128 percent above last year in inflation adjusted terms, while in historic terms there was an increase of 762 percent to $562,2 billion.

He said the last quarter of the financial year commenced on a strong note, with the units sold by the supermarkets in December surpassing those sold the previous year.

“Our focus is on strengthening the group operations’ capabilities to adapt to the evolving trading conditions,” he said. – @SikhulekelaniM1.

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