OK Zimbabwe, the country’s largest retail company, is locked in a fierce battle against informal traders who, according to the supermarket chain, are unfairly dominating the market and squeezing out formal businesses.
In its latest trading update, the company blamed “compliance with laws and regulations governing currency” for causing “high instore prices and loss of competitiveness, especially against unregulated markets.”
This is not the first time OK Zimbabwe has taken aim at informal traders.
Last year, the company spent months complaining about “tuck shops” which they accused of “forced death” on the formal retailer. However, their complaints were met with a fiery response from Ministry of Finance Permanent Secretary George Guvamatanga.
“If I was the OK Zimbabwe board,” Guvamatanga declared, “I would fire you because you will be useless management.” He argued that informal traders operate under vastly different conditions, paying higher rent, lacking access to credit, and buying goods in cash.
“Possibly they do not have better systems than what you have,” he added, “and they do not have access to the cheaper foreign currency.”
Undeterred by the criticism, OK Zimbabwe reiterated its position in the latest update. They claim that currency regulations are actually strengthening the informal market, leading to a 32% decline in their own volumes compared to the previous year.
The company also cited “stringent supplier payment terms” and “credit limitations” as affecting their stock availability and pricing.
Despite the challenges, OK Zimbabwe remains “optimistic about its future prospects.” They have vowed to adapt to the changing environment by focusing on “delivering value to its customers,” “enhancing customer experience,” and “optimizing operational efficiencies.”
“Looking ahead, the Group remains optimistic about its future prospects and recognizes the need to adapt to the changing operating environment.
“The business is focusing on delivering value to its customers by enhancing customer experience, executing fair pricing, improving market presence and optimizing operational efficiencies for long term sustainability,” the company added.
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