What retailers financials say about the state of Zimbabwe’s economy

By comparison, Kenya’s largest supermarket chain, the privately-owned Nakumatt, averages $700 million in annual sales operating in a $53 billion economy and serving a population which at 46 million, is nearly four times Zimbabwe’s.

Another regional peer, a leading listed supermarket in Botswana, Choppies, reported annual revenue of $718.93 million for the full year 2016 and net profit of $10.23 million.

However the group operates a total of 192 stores in six countries namely Botswana, South Africa, Zimbabwe, Kenya, Zambia and Tanzania.

Choppies operates 30 stores in Zimbabwe.

Additionally, Africa’s biggest supermarket group, Shoprite, in its full-year to June 2016, pulled in $1.7 billion revenue from its more than 300 stores across the continent, including Nigeria, Zambia, Namibia, DRC, Mozambique and Botswana.

OK Zimbabwe’s net profit margins are, however, lower compared to its peers, partly owing to high operating costs relative to its peers.

For instance, Botswana Stock Exchange-listed supermarket retail chain Choppies and South African Pick n Pay recorded net profit margins of 1.42 percent and 1.57 percent respectively while Ok Zimbabwe recorded a 1.28 percent profit margin.

Zimbabwe supermarkets operate in a market which is still significantly underpenetrated in terms of formal retail but face competition from an explosion in informal commerce.

As such, the performances of these supermarkets indicate that despite the sluggish outlook, Zimbabwe is a high performing economy which could get even better with the right policies.

The high retail sales, to a certain extent point to a potentially healthy economy or that Zimbabwe has high consumer spending, taking into consideration that  the big three grocery chains only have a combined 149 outlets across the country.

Performances of listed companies in non-food sectors, however, paint a picture of a depressed economy weighed down by low disposable incomes, the dollar note shortage and high levels of unemployment.- The Source

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