Bumper harvest to boost consumer spending: OK Zim

LISTED retail chain, OK Zimbabwe says the anticipated bumper harvest will spur consumer spending and consumption despite the Covid-19 pandemic, which has squeezed its performance as customer movements have been limited.

The 2020/21 summer cropping season is promising to yield positive results on account of good rains and farmers are excited.

In a trading update for the third quarter and nine months ended December 31, 2020, the retail chain said while the curtailment of non-essential business activity and restrictions on people mobility impacts both the supply chain and customer activity in retail outlets, its business has experienced reasonable levels of trade.

“Our stores were reasonably stocked at the end of the festive season and manufacturers of essential products have resumed production and are delivering goods to our stores,” said the Zimbabwe Stock Exchange-listed firm.

“The good rainfall received this agricultural season points to a good harvest and this is expected to result in improved consumer spending power and consumption.”

The retail chain comprises OK Stores, Money Wave, Bon Marchè, and OK Mart.

OK Zimbabwe said the cost of the Covid-19 pandemic precautions and awareness campaigns for staff, customers and the public at large has added to its operating costs, but the board and management consider this to be responsible business and worthwhile.

The group’s revenue grew by 27 percent for the quarter and three percent for the year to date in inflation adjusted terms and by 536 percent and 601 percent for the quarter and year to date respectively in historical terms.

“Sales volumes grew by seven percent for the quarter but were below prior year by 15 percent for the nine months,” said the retail chain.

It said while the year to date volume is negative this was an improvement from the retreat by 26,9 percent reported for the half year ended September 30, 2020.

“The group continues to operate profitably and margins for the third quarter were consistent with the performance reported for the half year ended 30 September 2020,” it said.

OK Zimbabwe’s directors and management have assessed the group’s cash generating capacity and are satisfied that the firm is capable of settling all its obligations as they fall due as well as continue operating profitably. —chronicleco.zw