What results of listed retail companies tell us about consumer spending in Zimbabwe

Edgars: New clothes? Not now

In times of crisis, buying clothing takes a backseat, especially at relatively upmarket stores. At Edgars, sales in the year to January 10 were down 36.5%. At low-cost store, Jet, sales fell 29%. Business was not only affected by low incomes, but also lockdowns. Edgars has been pushing online sales, but volumes are low.

According to Edgars, the increase of utility costs, such as fuel, will “limit customer demand” this year.

Credit sales have always been the hallmark of Edgars’ business. But a tough first half of 2020 threatened to upend this model. Credit sales fell in the second quarter of last year, and made up just 25.1% of total sales, from the previous 71.2%, “as both management and customers took precaution on the level of credit exposure”.

Results from Truworths were more stark in showing the impact of COVID-19: the company sold 57.5% less items in the year to July than in 2019.

Axia: Spending on homes remains a priority

TV Sales & Home is the country’s biggest furniture and household appliances retailer. In the six months to December, the company saw volumes 40% up compared to the same period in 2019. This, the company said, was because of the reintroduction of credit, as well as new stores. The results show that, in the segment served by the company, there is still money to spare for home improvement.

Supermarkets: Tough year, but standing

The two largest formal retailers had a tough year, marked by COVID-19 closures and low demand. Still, they showed resilience.

In the last quarter of 2020, traditionally good for retailers, sales volumes at OK Zimbabwe were 7% better than in 2019’s last quarter. But over nine months, sales were 15% lower. OK said in an update: “While year to date volume is negative this is an improvement from the 26.9% retreat reported for the half year ended 30 Sept 2020”.

Like other businesses, OK hopes the harvest will put some money in customer’s pockets, saying “good rainfall received this agricultural season points to a good harvest and this is expected to result in improved consumer spending”.

TM Pick n Pay’s sales volumes fell 4% in the December third quarter. Over the nine months to December, sales were down by 22%. For Pick n Pay SA, the Zimbabwe business outperformed all its other African businesses, outside of SA.

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