OK Zimbabwe records declined volumes

OK Zimbabwe Limited, a leading retail group in the country, experienced a 32 percent decline in volumes during the quarter ending December 31, 2023, compared to the previous year, and a 28 percent decline for the nine months ending December 2023.

Mrs. Margaret Munyuru, the group company secretary, said in a trading update for the period under review, that the group continues to implement volume growth strategies to stabilize business performance.

She, however, said “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”.

Group revenue for the quarter reached $568 billion, marking a 50 percent increase in inflation-adjusted terms compared to the previous year. In historical cost terms, group revenue grew by 535 percent to $490.5 billion.

For the nine months ending in December 2023, group revenue increased by 57 percent to $1.6 trillion in inflation-adjusted terms and by 501 percent to $1 trillion in historical cost terms.

“The business has adopted a structured cost containment program to align overhead costs with business performance,” Mrs. Munyuru said.

She highlighted that the period under review was characterized by a challenging operating environment due to the continued depreciation of the local currency against foreign currencies.

She noted that this depreciation led to persistent price changes that negatively impacted consumer demand and supply dynamics.

“Compliance with laws and regulations governing currency also posed challenges for the group, resulting in high in-store prices and a loss of competitiveness, especially against unregulated markets,” Mrs. Munyuru said.

Despite the challenges, OK Zimbabwe said it will continue to engage amicably with regulatory authorities to enhance macroeconomic stability and support the sustainable growth of formal retail businesses.

Mrs. Munyuru said the company remains optimistic about its prospects and recognizes the need to adapt to the changing operating environment.

“The business is focusing on delivering value to its customers by enhancing customer experience, executing fair pricing, improving market presence, and optimizing operational efficiencies for long-term sustainability,” she said.-businessweekly