Retailers feeling the heat
…..in relentless battle for survival

CLOUDINE MATOLA
Zimbabwe’s formal retail sector is on the brink, grappling with severe challenges that threaten its survival, Business Times can report.
Some empty shelves and dwindling revenues are becoming all too common as formal retailers struggle to stay afloat.
The rising tide of informal trading and a volatile economy have left many formal retailers feeling the heat, with some even considering closure.
Zimbabwe’s worsening economic conditions have dealt a heavy blow to the retail sector.
Rising inflation, a depreciating local currency, and low consumer purchasing power have created a hostile operating environment. Established retailers, once dominant in the market, now face declining sales and shrinking profit margins.
Among the hardest-hit sectors are food and groceries, clothing, and household goods.
The strain has forced some retailers to scale back operations, while others have shuttered entirely.
Those still operating face an uphill battle to compete with informal traders who dominate the market with lower prices and quicker turnaround times.
Informal traders tighten their grip
The rise of informal trading has significantly reshaped Zimbabwe’s retail landscape.
Informal traders, often sourcing goods through the black market at favorable exchange rates, have carved out a stronghold in the market.
These traders sell products at competitive prices, attracting cash-strapped consumers who prefer affordability over formal guarantees like receipts or warranties.
Denford Mutashu, president of the Confederation of Zimbabwe Retailers, told Business Times that that retail business was affected by both external and internal factors.
“It can be both internal and external factors,” he explained. “However, it should remain the keen interest of any economy to create operating conditions that sustain established businesses while remaining accommodative to emerging businesses.”
The government has attempted to regulate the informal sector through tax reforms. In his 2025 national budget, Finance Minister Mthuli Ncube proposed that informal traders pay corporate and personal taxes instead of the presumptive taxes currently in place.
However, implementing such measures remains a daunting challenge, given the vast scale and entrenched nature of informal trade.
Formal retailers losing the battle for supplies
The competitive advantage of informal traders is further reinforced by the shifting dynamics in supply chains.
Suppliers now prefer to sell their goods to informal tuck shops and street vendors, which offer cash payments upfront, rather than formal retailers who typically settle invoices over 30 days or more.
This has led to a striking paradox.
While formal retail outlets report stock shortages and empty shelves, the same goods are readily available in informal markets.
Adding to the woes of formal retailers is the widespread use of foreign currency in informal trading, which draws suppliers and consumers alike away from formal stores operating in Zimbabwe Gold (ZiG).
Major retailers sound the alarm
The challenges facing formal retailers were recently brought into sharp focus when pictures of empty shelves in circulated on social media.
Zimbabwe’s largest retailer, OK Zimbabwe, reacted, issuing a bold statement.
“Although the company faced intermittent product supply challenges during the festive period, we continue to serve our loyal customers and contribute to the economic growth and development of Zimbabwe,” said Margaret Munyuru, OK Zimbabwe’s group company secretary.
Munyuru emphasized the volatile operating environment as a key factor affecting the formal retail sector.
“We are grateful to our supplier partners, bankers, and other stakeholders for their support at a time when the company, as well as most of the formal retail sector, has been adversely impacted. We are actively engaged with our suppliers and key stakeholders to restore supplies to normal levels whilst working on solutions that stabilize the trading environment,” Munyuru said.
Impact on the economy and employment
The collapse of formal retail outlets would have far-reaching consequences for Zimbabwe’s economy.
Formal retailers are significant contributors to tax revenue, providing the government with much-needed funds for public services.
Additionally, they employ thousands of workers, many of whom would face unemployment if retailers continue to shut down.
Informal trading, while offering short-term relief to consumers, does not contribute meaningfully to the national tax base.
The uneven competition between formal and informal sectors is not only destabilizing the retail industry but also undermining efforts to rebuild Zimbabwe’s economy.
Proposed solutions for revitalizing the sector
To rescue Zimbabwe’s formal retail sector, stakeholders need to adopt a multifaceted approach:
- Strengthen supply chains: Encourage suppliers to partner with formal retailers by offering favorable payment terms, improving trust and reliability in the supply chain.
- Level the playing field
Introduce measures to ensure informal traders pay taxes proportionate to their earnings, reducing the competitive disparity.
- Stabilize the economy
Address macroeconomic issues such as inflation and exchange rate volatility to create a stable environment for business growth.
- Enforce market regulations
Crack down on smuggling, black market trading, and other illegal activities that distort market dynamics and disadvantage formal businesses.
A crossroads for retail in Zimbabwe
Zimbabwe’s retail sector stands at a critical juncture. Without urgent and coordinated action, formal retailers will continue to lose ground, threatening the livelihoods of thousands and eroding the country’s economic foundations.
The government, business leaders, and consumers all have a role to play in reversing this decline. By addressing structural challenges and fostering a more equitable business environment, Zimbabwe can restore confidence in its retail sector and pave the way for sustainable economic recovery.
For now, however, the industry remains under immense strain, with formal retailers fighting to survive in an increasingly hostile environment.