Retail giant, OK Zimbabwe Limited’s revenue and volumes performance for the quarter to June 30, 2021 significantly improved compared to same period last year buoyed by its flagship promotion, the OK Grand Challenge Promotion.
The promotion made a return this year after it was temporarily suspended in 2020 due to Covid-19 restrictions. The group, however, indicated the quarter under review remained challenging due to impacts of Covid-19 restrictions although significant improvements were noted in product supply that remained stable.
Its stores remained adequately stocked as supply partners moved timeously to fulfil growing demand.
“The business environment for the quarter under review continued to be characterised by Covid-19 induced restrictions. However, these restrictions were less severe compared to the same period in the prior year.
“Product supply remained stable on the back of improved availability of foreign exchange liquidity accessed through the auction system by our supply partners for both local and imported merchandise. Inflationary pressures were stoked midway through the quarter as market players reacted adversely to the promulgation of SI 127 of 2021, which seeks to criminalise dual pricing that is based on discounted US$ prices relative to the official exchange rate.
“Consequently, national and internally monitored inflation rates remained high in the quarter although experiencing significant reduction to the prior year inflation rates,”
said the group in a trading update for the quarter under review.
During the quarter, revenue grew by 263 percent in historical terms and by 49 percent in inflation adjusted terms. According to the group, volume performance was aided by a surge in aggregate demand across key product categories. Sales volume grew by 48 percent over the same corresponding period in 2020, attributed to a recovery from more stringent prior year Covid-19 restrictive regulations as well as the return of the OK Grand Challenge promotion.
Going forward, Covid-19 pandemic is expected to continue affecting economic performance and business operations. Already, the country is implementing restrictive measures to combat further spread of the pandemic in the country. Towards the end of the quarter, the country experienced a surge in Covid-19 infections and to combat the pandemic, Government responded by further tightening the lockdown restrictions.
“Business trading hours have been reduced from an average of 11 hours to 7,5 hours per trading day. The general curtailment of mobility and economic activity impact disposable incomes and consumer spending.
“The Group remains committed to operating in a sustainable and responsible manner to ensure staff and customer safety.”
It is however, not all doom and gloom as the accelerated national vaccination programme is expected to help contain the virus in the medium term and allow smooth flow of business operations across sectors.