OK Zimbabwe suffers US$25 million financial loss

Leading retail chain OK Zimbabwe Limited has reported a staggering US$25 million loss for the financial year ending March 31, 2025, as revenue plunged by more than half in what company chairman Herbert Nkala described as one of the toughest trading periods in the group's history.

The company's financial report shows revenue dropped 52 percent to US$245 million, a dramatic fall that Nkala attributed to a mix of economic instability, supply chain breakdowns, and growing competition from the informal sector.

"The decline is attributed to supply chain disruption, an unstable exchange rate—especially in the second half of the year—liquidity crunch in the economy, and heightened competition from the informal sector, compounded by exchange rate controls that distorted pricing," Nkala said.

Zimbabwe's retail industry has been under immense strain as formal players grapple with fluctuating exchange rates, inconsistent pricing policies, and eroding consumer spending power. The informal market, largely operating in hard currency, has continued to lure customers away from regulated supermarkets.

Nkala admitted that OK Zimbabwe's cash flow problems compounded the crisis, crippling the company's ability to keep its stores adequately stocked.

"The Group failed to settle suppliers' accounts on time, leading to some withholding deliveries while others demanded payment upfront," he said.

This breakdown in supplier confidence severely disrupted the retailer's operations, creating empty shelves and weakening customer trust. Nkala acknowledged that the group's operational capacity had been "negatively impacted," reflecting the far-reaching consequences of its liquidity crunch.

Despite the grim outlook, OK Zimbabwe has embarked on a comprehensive restructuring exercise to stabilise operations and restore growth. The chairman cautioned, however, that the turnaround process would take time.

"Though the recovery of the Group has started, it will take some time to return to normal operations," Nkala said.

The company's leadership remains optimistic that ongoing reforms—focused on improving supply chain efficiency, cost control, and customer retention—will eventually restore the retailer's market position.

OK Zimbabwe's struggle reflects the broader economic difficulties facing Zimbabwe's formal retail sector, which continues to battle currency volatility, inflationary pressures, and constrained consumer spending in a highly dollarised economy.