BY TATIRA ZWINOIRA
The country’s largest retail chain OK Zimbabwe says the sector is under immense pressure because of currency volatility, but the company anticipates sales volumes to grow by between 10% and 20% this year on the back of promotional discounts.
Speaking at the launch of this year’s edition of its annual flagship promotion, OK Zimbabwe chief executive officer Alex Siyavora said discounts would drive sales despite the difficult trading environment.
“The concept of the grand challenge is for the supplier to discount their prices for volumes, but they have got challenges as well because of the price of currency. They might increase their prices, but they will continue to give a discount. So where you would normally have a price going up and staying there, they will instead give a discount through the promotion because they are trying to encourage volumes,” Siyavora said.
“It is all a negotiation of each supplier. We got negotiations before the launch and we do have parameters which our procurement guys handle . . . by the way you can’t lock them forever. The supplier can come in and say ‘no, can we review this one?’.”
“What we want is for it to grow over last year, but what growth rate you can talk about is difficult to say because the supply side is under pressure at the moment. But, if we can achieve what we achieved last year and better still grow by whatever percentage of say 10% or 20% we will be happy,” he said.
This year’s edition of the OK Grand Challenge, has 41 distributors supplying 151 products as of Tuesday.
All 64 OK Zimbabwe stores across the country will participate in the promotion which will give 245 weekly winners a chance to walk away with either cash or product prizes. The OK Grand Challenge promotion is expected to end on May 31, 2019 with the grand draw and a jackpot horse race at Harare’s Borrowdale Race Course slated for the following day.
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In the first half of the year to September 2018, OK Zimbabwe reported a 61% increase in earnings per share (EPS).
Topline earnings surged 23% in the same period at US$330 million resulting in a net profit of US$8,4 million.