TV Sales & Home, a leading retailer of home appliances and electronics, has recorded a 22 percent increase in volumes in the second-quarter to December 31, 2022 compared to the same period last year.
This growth is attributed to the success of the Black Friday and Ho-Ho-Home market activation promotions, which were well-received by consumers.
However, the year-to-date volume performance increased by only 3 percent compared to the prior year, due to a disappointing first quarter performance.
The first quarter was affected by restrictive pricing pressures experienced in the first two months of the quarter.
“The local trading environment in the first half of the financial year was characterised by the depreciation of the local currency, unstable and multiple exchange rates, high inflation and the pass-through impacts of rising global inflation together with supply disruptions arising from Covid-19 and the Russia/Ukraine conflict,” said chairman Luke Ngwerume (pictured) in an update for the half year period.
Although there was overall volume uptick, not all business units saw growth in the second quarter. Volumes at Restapedic, a bed manufacturing business, decreased by 20 percent to the comparative period due to unsatisfactory first-quarter performance.
The disappointing first-quarter performance by the retail business cited above had a negative impact on the demand for Restapedic products in the same period. In addition, Restapedic experienced intermittent raw material supply gaps attributed to delays in forex auction payments, resulting in a downturn in volumes during the second quarter.
The lounge suite manufacturing business also experienced raw material supply gaps attributed to delays in auction payments, resulting in a 15 percent decline in volumes compared to the comparative period.
The business is redesigning products and improving the range on offer to enhance the availability of affordable products that can be sold on credit in response to market demands. The business made progress on the export front, with the first orders.
Despite these economic challenges, TV Sales & Home continues to invest in volume growth initiatives, including introducing new product ranges from local manufacturing units as well as imported products.
The company has also opened two new stores in Harare during the first quarter, with plans to expand the retail store network and upgrade existing stores to improve customer experience.
“Two new stores were opened in Harare during the first quarter. Plans are underway to expand the retail store network which include opening new stores in the second half of the financial year coupled with upgrades to outlooks of existing stores to improve customer experience.
“At least three new stores will be opened in the second half of the financial year with a new store concept, Bedtime Store, opening its first store. Volumes are expected to improve in the second half of the financial year following the addition of a new home appliances and homeware distribution business,” said Ngwerume.
To boost local currency credit sales, the company is leveraging proposed policy changes such as the review in lending rates. This move is expected to improve revenue streams in the last half of FY2023.
TV Sales indicated the reintroduction of US dollar credit has seen significant growth in the US dollar debtors’ book, which increased by 382 percent between September 2022 and December 2022. Collections on the debtors’ book have remained solid, indicating a positive outlook for the company.