Zim's biggest retailer feels bite as consumer demand dwindles

Harare - Zim’s biggest grocery retailer OK Zimbabwe posted a 7.5% drop in net sales for the first quarter to June 2014.
 
In a trading update on Thursday afternoon management said the operating environment had continued to deteriorate characterised by falling consumer demand.
 
CEO Willard Zireva said sales generated during the period were poor despite the reduction of prices by both retailers and suppliers.
 
Profitability margins were also said to be under pressure as competition for the dwindling disposable incomes intensified.
 
In reaction OK Zimbabwe had converted some 19 of its conventional stores into a new value brand targeted for low income earners.
 
The first quarter results comes at a time aggregate demand in the country is set to fall further as most companies stampede to dismiss workers following Friday’s Supreme Court ruling that firms can terminate contracts of employment upon issuing a three months’ notice.
 
Public Service, Labour and Social Welfare Minister Prisca Mupfumira was quoted saying hundreds of workers have been sacked following the ruling.

Investec Asset Management  through Investec Frontier Private Equity Fund (IAFPEF) is a significant shareholder in OK Zimbabwe.