RETAIL giant, OK Zimbabwe says it projects significant volumes rebound this month, as shoppers troop back to spend for Christmas.
An influx of shoppers is anxiously anticipated by Zimbabwean retailers.
Together with some fragile sectors like tourism, retailers suffered the harshest knocks when the Covid-19 pandemic rattled the markets from March, forcing governments to close economies in order to contain the contagion.
In the end, volumes plummeted across markets.
But the listed retail chain rolled out two outlets in Harare and Victoria Falls during the half year ended September 30, 2020, demonstrating that Zimbabwe’s largest retailer remained confident even as the headwinds exert pressures on revenues and profit.
In an exclusive interview with businessdigest this week, chief executive officer, Alex Siyavora said he looked up to the remainder of the year with optimism.
“We reported a 35% drop in volume sales in the first quarter ending June 2020. Demand in the economy had already been declining (when Covid-19 arrived) because of the erosion effect of hyperinflation on incomes. Covid-19 pandemic disruptions compounded the slowdown,” Siyavora pointed out.
“The volume sales drop had however improved from 35% (during the first quarter of the 2020) to 26% by September 30, 2020. We expect sales volumes to pick up in the remainder of the financial year,” he said.
The retail giant is aggressively targeting to expand its market share by next year, when a rebranding project winds up.
OK has a footprint in 67 outlets across the country.
Siyavora said OK is undertaking extensive market research as it seeks to fortify its stronghold on the Zimbabwean retail space.
“Customers’ needs and aspirations change, and rebranding addresses this dynamic,” he said.
“OK Zimbabwe is the dominant retailer in this market. Rebranding is an opportunity to grow our market share by keeping our customers and attracting new ones. The process starts with extensive market research to understand market trends, customer needs and tastes.”
OK’s top line came off 16% to ZW$11,64 billion (about US$135 million) during the half year ended September 30, 2020, from ZW$13,79 billion (about US$160 million) previously, after spending power was hammered by blanket lockdowns.
The lockdowns also reduced operating hours and traffic for all retailers including OK.
The retail giant posted a 33,23% decrease in profit after tax to just under ZW$1 billion (about US$12 million) after Covid-19 induced restrictions triggered depressed demand.
OK posted ZW$1,49 billion (about US$12,5 million) in post-tax profit during the comparable period in 2019.
Apart from hammering spending power, the blanket lockdowns announced by the government from March to mid-September reduced operating hours and traffic for all retailers including OK.