LEADING retailer OK Zimbabwe has credited the recently introduced Zimbabwe Gold (ZWG) currency for easing inflationary pressures and generating some form of stability.
On April 5, the Reserve Bank of Zimbabwe introduced a new “structured currency” ZiG to tackle the ongoing economic crisis in the country. The new currency is backed by gold, and other precious minerals, and will circulate alongside other foreign currencies.
The ZiG currency is currently trading at a rate of around 13:80 against US$1 although premiums are higher on the alternative market.
Presenting a trading update for the period ended June 30 2024, OK Zimbabwe group company secretary, Margaret Munyuru hailed the local unit’s inception.
“The introduction of the new Zimbabwe Gold currency (ZWG) brought with it a measure of stability. This resulted in year-on-year inflation declining from 57.48% in April 2024 to 3.76% by 30 June 2024. The fiscal and monetary measures being implemented by the government are highly commendable.
“The group remains committed to delivering value to its shareholders by focusing on executing fair pricing, expanding market presence and optimizing operational efficiencies while prioritizing customer satisfaction for long-term sustainability,” she said.
Munyuru however bemoaned the shortage of foreign currency in the formal banking sector and continued to put pressure on the exchange rate and some stakeholders began to insist on US$ payments for products and services.
Authorities have since allowed the sale of goods and services in US$ to allow companies to generate foreign currency internally and augment the already existing support systems.
Meanwhile, during the reporting period, the top retail group saw volumes increasing by 20.2% compared to the same period in the prior year attributed to improved performance of the OK Grand Challenge promotion, which marked the inaugural participation of the Group’s OKmart stores.
The group contends the success of this promotion was further bolstered by the ongoing support from key partner suppliers, who played a crucial role in its execution.
“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,” Munyuru said.
Over the period, revenue increased by 2,2% for the first quarter ended June 2024 compared to the same period in the prior year.
US collections, however, dropped significantly from FY2024 last quarter and FY2025 first quarter as most consumers were now using ZWG.
Despite the significant increase in volumes, sales values increased marginally as a result of the growth in contribution of bulk product sales that carry a lower unit price resulting in an increase in basket size of 28% against a customer count decline of 6,8%. — NewZimbabwe
