A cashier in a leading supermarket dispenses the new $10 ZiG, short for Zimbabwe Gold note from a till as change in Harare on April 30, 2024. Zimbabwe launched the ZiG on April 5, 2024 to replace the Zimabwean dollar as it sought to tackle sky-high inflation and stabilise the country's long-floundering economy. Picture: AFP
Revenues and volumes in Zimbabwean retailer OK Zimbabwe surged in the quarter to June, with US dollar payments falling as take up of the country’s new local currency improved while the chain also benefited from promotional offerings.
OK Zimbabwe competes against Pick n Pay-branded stores in the southern African country’s retail sector that also imports stock from South Africa, Mozambique, and Zambia.
Margaret Munyuru, company secretary for OK Zimbabwe, said on Friday that revenue for the quarter to end June had increased by 2.2%.
In previous quarters, Zimbabwe’s retailers including Pick n Pay and Spar have been affected by a rapidly growing informal sector and pricing distortions as a result of fluctuations in Zimbabwe’s previous currency, the Zimbabwe dollar.
After introduction of the Zimbabwe Gold (ZiG) local currency in April, take up of the local unit has improved, said OK Zimbabwe.
The ZiG currency has maintained stability in value since introduction, and according OK Zimbabwe, purchases in US dollars have started to fall.
“USD collections, however dropped significantly from FY2024 last quarter and FY2025 first quarter as most consumers are now using the ZiG,” said the company.
Volumes for the June quarter increased by 20.2% compared to the same period in the prior year. OK Zimbabwe attributed this to improvement in the performance of the OK Grand Challenge promotion.
“Additionally, the stability of pricing during this period contributed positively to volume recovery, as customers responded favourably to the group’s commitment to fair pricing practices.The introduction of the new Zimbabwe Gold currency (ZWG) has brought with it a measure of stability,” the company said.
Despite stability in value, the ZiG currency has been dogged by liquidity challenges in the past few weeks. OK Zimbabwe and other Zimbabwe-listed companies have noted the impact of the liquidity challenges.
John van Gend, managing director for Nampak Zimbabwe, said on Friday that the quarter to June had “largely been affected by tight liquidity following the introduction of the new ZiG” currency.
Despite tight liquidity, which affected volume offtake in some product lines for the company, overall volumes for the third quarter were 2% up compared to the prior year period, he added.
Said OK Zimbabwe: “While the liquidity challenges impacted trading during the period, the RBZ increased ZWG notes and coins in circulation, easing change shortages and has taken further steps post the quarter to curtail liquidity constraints.”
Zimbabwean retailers have until now been struggling in an increasingly informal market. Retailers in the southern African country have complained of higher taxation and the effect of cheaper stock as having a toll on their earnings potential.
For Truworths Zimbabwe, which is now under business rescue, these challenges have resulted in the company shutting down branches.
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