Profits by Zimbabwe’s largest supermarkets show inflation surge

Zimbabwe’s largest retailer, OK Zimbabwe last week said its internal tracking of inflation showed that inflation stood at 7.69 percent in September, much higher than the 0.78 percent given out by the Zimbabwe Statistics Agency (Zimstats), laying bare the difference between official figures and the situation on the ground.

OK Zimbabwe calculates its inflation based on the changes in prices of its product range.

Its financial results are also reflective of the influence of high inflation.

This explains why three main retailers are posting impressive performances relative to regional peers.

Three main retailers dominate the Zimbabwean market: OK Zimbabwe, TM Supermarkets and Choppies all of whom are delivering good value to their shareholders despite a sluggish economy characterised by acute forex challenges and waning aggregate demand among other challenges.

The performance, as OK Zimbabwe said, is attributed to the inflationary environment coupled with the use of electronic means of payment as the economy moves to plastic money to counter the prevailing serious cash shortages.

The largest retail group OK Zimbabwe’s net income more than doubled to $5.1 million in the six months to September, from $2.3 million in the comparable period last year on increased revenue and inflationary pricing.

Revenue rose 22.6 percent to $268 million from $218.6 million in the same period last year.

Another retailer with operations in Zimbabwe, Choppies which is listed in Botswana, also said revenue at its Zimbabwe operations grew by 17 percent in full year ended June despite a sluggish economy underlined by chronic shortages of cash.

The growth in revenue was despite a three percent decline in sales over the period, explaining the ‘ inflation factor’ which is driving retailers performance in Zimbabwe.

Choppies has 32 outlets in Zimbabwe. It operates in South Africa, Kenya, Tanzania and Zambia.

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