OK Zimbabwe adopts new procurement strategy to ease stock shortages
Zimbabwe– OK Zimbabwe Limited is working to restore normal stocking levels before the end of the financial year through new procurement models and support from supplier partners and financial institutions, the retail giant said in a trading update on Friday.
“The business has begun restocking the operating units with support from supplier partners as well as financial institutions that continue to assist with short-term funding structures,” said Group Company Secretary Margaret Munyuru in a trading update. “New alternative procurement models have been developed which include, but are not limited to, a structured stock supply arrangement with a third party for supplier assurance purposes.”
The company said the fortunes of Zimbabwe’s formal retail sector are tied to exchange rate stability. “Consultations with both Fiscal and Monetary Authorities have led to a relaxation of the very strict policing of applicable in-store exchange rates,” Munyuru said. OK Zimbabwe welcomed the recently announced monetary policy measures, which removed some limitations and introduced greater flexibility in the foreign exchange market but called for “absolute clarity on the roadmap towards a full market-determined exchange rate system.”
OK Zimbabwe reported a 36% decline in revenue for the third quarter ended 31 December 2024, attributing the drop to subdued consumer spending, currency devaluation, and supply chain disruptions.
The company faced acute local currency liquidity shortages, which restricted access to funding for working capital cycles. A sharp devaluation of the Zimbabwean dollar (ZWG) in September 2024 nearly doubled the group’s US dollar-denominated obligations in loans and creditor balances.
Stock availability dropped to around 50% of normal levels due to limited supplies from manufacturers and distributors. The company reported that low US dollar sales collections, at times as low as 20% of sales revenue, exacerbated supply challenges.
“Suppliers continued to insist on shorter trading terms and, in some cases, prepayments for supplies invoiced in local currency,” Munyuru said. This strained the group’s working capital and increased reliance on short-term funding.
Power outages further disrupted operations and increased costs. In response, OK Zimbabwe closed four branches in Harare—Glen Norah, Kuwadzana 5, Chitungwiza Town Centre, and Robson Manyika Street. The company is reviewing the future of branches with unsustainable cost structures.
Despite the quarterly decline, the group recorded a 10% year-to-date volume growth compared to the previous year.
The company remains in consultation with fiscal and monetary authorities and continues to engage supplier partners and financial institutions to stabilize operations.
