Power cuts, informal market chokes OK Zim

BUSINESS REPORTER

Retail giant OK Zimbabwe says it is reeling under the long list of challenges that include incessant power cuts, uncertainty over government policies and immense competition from informal traders.

Presenting the financial results yesterday, the company said it has suffered an 8% drop in sales volumes in the year to March citing a lot of challenges that include currency volatility.

Company CEO, Max Karombo said at least 20% of the company’s sales were in United States dollars.

The company, he said, has to convert prices from Zimbabwe dollar to United States dollars at formal official rates, which makes their United States dollars prices high.

Karombo said the company was spending enormous amount of money just to “keep doors open.”

The biggest cost drivers included diesel backup to counter load shedding, rentals and labour costs.

In its list of constraints under the prevailing environment, the company said government policies’ lack of certainty were also affecting operations.

Untamed hyperinflation and multi-tier exchange rate distortions affecting pricing strategies, official exchange rate and the parallel market rate disparity driven by local currency depreciation were also cited as constraints affecting business.

The issue of erratic power supply, the company said, was significantly increasing the cost of doing business.

OK Zimbabwe also confirmed it remain under siege from informal traders who operate mainly from different suburbs, others in downtown Harare and most cities.

Informal traders have also taken their business at the doorsteps of major retail outlets.