HARARE – Retail giant OK Zimbabwe has attributed its recent volume recovery to stable pricing in the months leading up to June 30, 2024, as customers responded positively to the company’s commitment to fair pricing.
The group’s performance was buoyed by the stability of the domestic economy, driven in part by the introduction of Zimbabwe’s new currency, the Zimbabwe Gold (ZiG), in April 2024.
The introduction of the ZiG has contributed to stabilizing inflation, the exchange rate, and the broader economic environment. As a result, the prices of basic commodities and other consumables in the grocery retail sector have remained largely stable since the currency’s rollout.
In a trading update for the quarter, OK Zimbabwe’s group company secretary, Margaret Munyuru, revealed that sales volume increased by 20.2% compared to the same period last year. She highlighted that the growth was significantly influenced by the improved performance of the OK Grand Challenge promotion, which for the first time included participation from the group’s OKmart stores.
“The success of this promotion was further bolstered by the ongoing support from our key partner suppliers, who played a crucial role in its execution. Additionally, the introduction of the new Zimbabwe Gold currency (ZiG) brought with it a measure of stability,” said Munyuru.
Munyuru also noted that Zimbabwe’s domestic economy remains on a growth trajectory, and OK Zimbabwe is positioning itself to capitalize on opportunities arising from increased consumer spending. Although liquidity challenges affected trading during the quarter, the Reserve Bank of Zimbabwe (RBZ) has worked to alleviate these issues by increasing the circulation of ZiG notes and coins, easing change shortages.
During the period under review, group revenue increased by 2.2% compared to the previous year. However, Munyuru pointed out that U.S. dollar revenue saw a significant decline in the last quarter of FY2024 and the first quarter of FY2025, as more consumers have shifted to using ZiG.
“Despite the significant increase in volumes, sales values increased marginally due to the growth in bulk product sales, which carry a lower unit price. This resulted in a basket size increase of 28%, despite a customer count decline of 6.8%,” Munyuru explained.
OK Zimbabwe praised the government’s fiscal and monetary measures and reaffirmed its commitment to delivering value to shareholders. The company plans to focus on executing fair pricing, expanding market presence, and optimizing operational efficiencies, while prioritizing customer satisfaction for long-term sustainability.
However, the company also noted that foreign currency shortages in the formal banking sector continue to exert pressure on the exchange rate, leading some traders to demand U.S. dollar payments for goods and services.
Source: Herald