One of Zimbabwe’s leading retailers OK Zimbabwe recently published some interesting statistics outlining how the business performed during the second quarter of 2022. While a lot of businesses have suffered due to a decrease in overall consumer demand and buying power OK seems to have weathered the storm and even recorded a 1% growth in sales volume compared to last year’s performance during the same period.
This is what the company had to say about their performance from April to June:
A summary of OK Limited’s glowing achievements
- Sales volumes for the quarter grew by 1% against prior year (2021).
- Sales values incresed by 237% from prior year in historaical terms and grew 40% in inflation-adjusted terms
- Profit margins were consistent with prior year (2021) and in line with the Group’s plnas for the current year
These are impressive figures for a retailer in any part of the world let alone Zimbabwe where the operating environment is even tougher. OK Limited had to shrug away hurdle after hurdle to achieve this feat. Some of the issues they have head to contend with include:
- World record inflation of 191.6% compared to 72.7% as recorded at the end of December 2021.
- Monthly inflation of 21% and 30% in May and July respectively. Inflation erodes the buying power of customers and generally leads to a decline in sales.
- Being forced to use the willing buyer willing seller rate means that OK’s USD prices are often higher and uncompetitive compared to tuckshop prices. This means less foreign currency goes into their coffers.
- Regular shortages of essential items like maize meal and cooking oil
- A clumsy IMT tax which is now also applicable on USD transactions at 4% means more taxes for OK and depressed demand due to less buying power from customers.
A difficult future
Like everyone else, the company is very much aware that the future is going to be full of hardships. OK has vowed to continue to engage with Zimbabwe’s tough-talking financial authorities to make sure that the foreign currency market is liberalised and they are exempted from the 4% tax, work on its growth strategy as well as upgrade some stores.