Softening demand erodes OK Zimbabwe volumes

LISTED giant retail group OK Zimbabwe Limited says its sales volumes dropped by about 29,2 percent due to softening consumer demand during the period to 30 June 2024.

In its annual report for the year ended 31 March 2024 that was issued recently, the group noted that market distortions during the period resulted in increased prices, which saw consumer spending power declining.
“Items sold declined by 29,2 percent against prior year driven by the market pricing distortions imposed on the group.

“This was compounded by constraints within the macro-economic environment that resulted in steep price increases, decline in consumer spending power, as well as restrictive supplier trading terms that adversely impacted product availability,” reads the report.

Further, the group noted the rapid deterioration of the exchange rate, especially during the fourth quarter of its financial year, a situation that created difficulties in long range planning and operational execution of the company, it said.

In the first quarter of 2024, the retail group’s volume performance was minus 21,6 percent, worsening to 23,9 percent in the second quarter, while the year-to-date volume performance witnessed a 22,6 percent decline from last year.

The company has attributed this to a myriad of headwinds that included high-interest rates and limited access to funding, which in turn affected capital expenditure and some of its investment plans.

OK Zimbabwe also pointed out that its foreign currency collection has decreased in favour of the Zimbabwe Gold (ZiG).

“Whilst the full impact of the introduction of the new currency is still being assessed, the group’s foreign currency collection have declined in favour of ZiG,” said the company.

Meanwhile, the company is keen on sustaining its volume growth through consistent product availability and fair pricing campaigns.-chroncile