eBusiness Weekly
Tapiwanashe Mangwiro
OK Zimbabwe has bemoaned power outages experienced countrywide saying the interrupted electricity supply affected its operations in the past nine months.
The retail giant revealed this in a trading update this week.
“Debilitating power outages worsened during the trading period as supplies from the national utility, ZESA, became unpredictable and unbearably long.
“Alternative power sources remain expensive, inadequate and increase operating costs for businesses,” it said.
Despite the power problems, OK said sales volumes rose 8 percent in the third quarter ending December 31, 2021 on seasonal demand and increased consumer liquidity.
For the nine months, volumes were up 27 percent. Analysts say the growth will pave way for a sustained recovery for the group.
The group said despite the challenging environment, the company’s stores remained stocked for the past festive season.
Currently consumers are taking a more cautious approach to shopping as higher inflation above the level of earnings eats into their spending power.
“Payment of civil servants’ emoluments in foreign currency, heightened agricultural activity, and resumption of normal school calendar are expected to result in an upturn in consumer spending,” said the company in the update.
During the third quarter review revenue grew by 29 percent and 37 percent for the year-to-date in inflation adjusted terms.
“The flexibility offered through various promotional discounts helped improve foreign currency sales revenues and managed to stem illegal forex trades by vendors in the various shopping centres, where the company operates from.”
This comes after the company worked with the Reserve Bank of Zimbabwe to co-create solutions around in-store foreign currency trading.
Profit margins for the third quarter were higher than reported for the half year ended September 30, 2021 owing to improved operational effectiveness, according to the company.
On a monthly basis the company requires about US$1,4 million to cover both goods imported for trade and equipment.
“The group anticipates an improvement in the product supply environment on the back of a combination of increased foreign currency collections in-store as well as renewed commitment by authorities to improve efficiencies on the RBZ auction system.”
The company said the Covid-19 lockdown restrictions remained in place throughout the quarter as the Omicron variant caused havoc with its relatively easy transmissibility.
The company embarked on a vaccination drive that resulted in 99 percent of the staff getting vaccinated against Covid-19.
