- Volume Up, Value Down: Volumes surged by 20.2% but overall sales revenue increased marginally due to a shift towards lower-priced bulk products
- Fewer Customers, Bigger Baskets: Customer count declined by 6.8%, but those who visited bought more items per visit
- USD Collections Dip: The shift towards the ZiG currency has resulted in a significant drop in USD collection
Harare- OK Zimbabwe, a leading retail group in the country, has reported a mixed bag of results for the first quarter to FY25 ended 30 June 2024 with high volumes but less profit.
OK Zimbabwe sold significantly more products (20.2% increase in volume) but saw only a small increase in overall sales revenue. This means the average price of items sold was lower.
This was because the company sold more bulk products. These items typically have lower per-unit prices, even though customers are buying more of them in one go.
(Think of buying a large bag of rice versus a small packet – the price per kilogram is lower for the larger bag.)
This was reflected in the "basket size" increasing by 28%.
Customers bought more items per visit, but the number of customers visiting the store decreased by 6.8%.
This suggested that the bulk products were attracting fewer customers, but those came bought in larger quantities.
In essence, OK Zimbabwe sold more, but making less profit per item sold. This is a common trade-off when focusing on bulk sales to increase volume.
This doesn't necessarily mean the strategy was bad. However, it does highlight the need for careful analysis of profit margins and the potential need to adjust pricing strategies maybe in the future.
The success of the OK Grand Challenge promotion, which saw the participation of OKmart stores for the first time, contributed significantly to the growth in volumes
“The success of this promotion was further bolstered by the ongoing support from our 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,” the group said.
USD collections dropped significantly from the previous quarter and the first quarter of the previous financial year.
However, the company remains optimistic about its future, emphasizing its commitment to delivering value to shareholders by focusing on fair pricing, expanding its market presence, and optimizing operational efficiencies.
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