ZWL exchange rate instability wreaking havoc on retail data: Choppies

According to the company’s integrated annual report 2023, persistent currency challenges in Zimbabwe, which are related to swings or instability in the Zimbabwean dollar, make it difficult for firms to plan and price their products effectively. This can dramatically reduce profitability because the cost of running the business rises rapidly, while revenue may not keep up.

According to the report, hyperinflation is causing major pain in its figures on a regular basis, showing a significant negative impact on Choppies’ financial performance in Zimbabwe.

“Zimbabwe has been our main challenge and concern during the year as growth stalled and the currency issues continue. We are keeping a close eye on conditions in the country. Hyperinflation is inflicting serious pain on our figures on a continuous basis,” Choppies Chairman Uttum Corea said.

Disposable income growth would remain below anticipated inflation for each year of the medium-term forecast period, reflecting Zimbabwe’s precarious consumer situation. As a result, Zimbabwean households are projected to continue to face a number of difficulties that have a significant impact on expenditure, including triple-digit inflation and decreasing remittance inflows from South Africa and the United Kingdom.As a result, Zimbabwean consumers will continue to be price sensitive, shifting their spending to lower-cost alternatives and the informal economy.

According to the company’s financials, Zimbabwe’s EBITDA fell 108.1% to BWP3 million loss, compared to BWP37 million profit in 2022, due to the economy’s difficulties.

Despite the problems, Choppies appears committed to the Zimbabwean market, as the report states that the company is “keeping a close eye on conditions in the country,” implying that they are monitoring the economic situation and may be searching for ways to enhance their performance.

During the period under review, one new store opened in Zimbabwe, and Choppies performed satisfactorily, despite the fact that its profitability was impacted by Zimbabwean problems. However, it reported an increase in stores and income in Botswana, Zambia, and Namibia.Choppies is Southern Africa’s largest retailer outside of South Africa, with 177 outlets in Botswana, Zimbabwe, Zambia, and Namibia, as well as 10 distribution hubs.