Zimbabwe Stock Exchange listed entity OK Zimbabwe Limited opened a new outlet in Harare’s Glen View suburb last week as the grocery retailer continues to consolidate its market share in the retail space.
The new store becomes the retailer’s 49th OK Store and brings the Group’s total outlets to 63 including eight Bon Marche’ and six OK Mart stores.
Speaking at the company’s annual general meeting last month chief executive Alex Siyavora, said the new outlet was in a good location and should be a positive addition to the group.
“We believe the store is in a good location and should generate good sales,” he said.
The new branch which is located at corner Glen View Way and Patrenta, two roads that connect most of Glen View, is also expected to service other nearby residential areas such as Budiriro, Glen Norah and the sprouting Churu Farm.
The retailers expansion drive is seen by analysts as a sign of confidence in the country’s economy.
Market watchers are also of the view the current momentum in the economy will remain in the near future particularly the use of plastic money which will have an impact on OK’s performance.
Analysts have already projected the retail giant’s revenue for the financial year 2019 to jump 11 percent to $651 million on the back of the anticipated robust performance in the primary sectors that drive consumer market coupled with the use of plastic money.
In the financial year 2018, OK’s revenue jumped 23 percent to $582 million on the substantial migration of transactions from cash dependent informal sector to formal sector where the use of plastic money has become the order of the day.
In Glen View, OK is likely to claim the bigger chunk of the market share as most outlets are semi-formal and are still to adopt electronic payment systems while those making use of POS machines have their prices at a premium compared to cash prices.
A strong performance from the new outlet will be a positive addition to the Group, which has already recorded strong results for the first quarter of the financial year 2019.
Revenue for the first quarter of the financial year 2019 rose 20 percent above same period last year as the group maintains the growth trajectory reported at its year end.
Briefing shareholders at the group’s annual general meeting in the capital in July, Mr Siyavora said the group was enjoying positive growth over prior year comparable period with performance ahead of budget.
The retail giant runs one of the country’s biggest annual promotion, the Grand Challenge Jackpot Promotion.
This, Mr Siyavora said, significantly contributed to the quarter’s performance.
“The growth reported on at year end F18 is continuing. Revenue growth was 20 percent and it is growing ahead of increases in operating costs and that is good for profitability,” he said.
Like other companies operating in a challenging economy, OK experienced supply problems, but management is upbeat of improvements in supplies which has already been noted.
This should see the firm meet its sales targets for the next quarter as well as maintain the growth in earnings.