ONE of the paradoxes of Zimbabwe’s economy has been that as the downturn worsened, forcing companies to close or implement ruthless cost cutting measures, retailers and other businesses that directly interface with consumers were on a wave.
Riding on their capacity to resort to imports and pack shelves with cheaper, high quality merchandise, consumer-facing outfits have been on something of a fairy-tale, generating brisk business while the rest of the industrial sectors battled to get over hostile headwinds. However, their profitability, cash generating prowess and revenues have started to come off, signifying a major shift in macroeconomic temperatures.
This could yet be another pointer that entire economic sectors have plunged into troubles. They are beginning to give in to the crippling crisis that has destroyed what was once southern Africa’s most prominent industries. The last sector standing could be headed for the swamps, giving government the clearest sign that economic fundamentals will not respond to populist pronouncements by ministers, but to real and practical action.
Revenue at the listed retail giant, OK Zimbabwe Limited, came down 4,8 percent to US$232 million during the half-year ended September 30, 2014 from US$243 million in 2013, as “liquidity constraints, wide business failures and increased unemployment” […]