Retailers: The crumbling pillar of Zim’s commerce on the brink

PHILLIMON MHLANGA The shelves are empty. Checkout counters are silent. Formal retailers crumble. The informal sector could play the undertaker. Once the bustling arteries of Zimbabwe’s economy, retail and wholesale outlets now stand as ghostly remnants of a fading era. Shelves once stocked with abundance now echo with emptiness. Checkout counters, where the rhythmic beep of transactions once sang the melody of commerce, have fallen silent. A grim reality grips the sector, suffocating it under the weight of a hostile economic environment. The casualties are mounting. Food World, a household name, has shut its doors. Choppies, the Botswana-headquartered retail giant, is beating a hasty retreat. N. Richards is scaling back, exiting Harare’s retail market. OK Zimbabwe stares down financial ruin. Even Pick n Pay has surrendered, writing off its investments in TM Supermarkets. What was once a thriving sector is now unraveling. The retail landscape of Zimbabwe is being redrawn—by the invisible hand of economic turbulence. The Perfect Storm: A VUCA nightmare Zimbabwe's retail sector is battling a VUCA (volatile, uncertain, complex, and ambiguous) environment. The challenges are relentless—spiraling inflation, a crumbling currency, and an unforgiving fiscal and regulatory landscape. Inflation, the economy’s silent executioner, has struck with renewed force. In January, U.S. dollar inflation shot up to 11.5% month-on-month from 0.6% in December 2024, while local currency inflation surged to 10.5% month-on-month from 3.7% in December 2024. Prices shift unpredictably, eroding consumer confidence and eating away purchasing power. What one could afford today might be unattainable tomorrow. The Zimbabwe Gold (ZiG), introduced with great fanfare as the country’s currency saviour, is weakening. It now trades at ZWG26.3 per U.S. dollar, a stark reminder that trust in currency is not built on promises but on stability. At the root of this crisis lies an economic paradox: a dollarized supply chain versus a currency-restricted consumer base. Formal retailers accepting the ZiG, yet their suppliers demand U.S. dollars. Operating costs—fuel, rentals, import duties—are overwhelmingly dollarized. This financial mismatch has become an insurmountable hurdle. Retailers cry foul: “The odds are stacked against us” Denford Mutashu, president of the Confederation of Zimbabwe Retailers (CZR), doesn’t mince words. “CZR is deeply concerned about the continued closure of formal retail and wholesale businesses, a direct consequence of the prevailing turbulent economic environment that has consistently failed to support formalized sector players.” Mutashu paints a bleak picture of an industry gasping for survival. “The fiscal, monetary, regulatory, and statutory frameworks have remained unforgiving to formal retail and wholesale operators. These challenges have created an uneven playing field, allowing the informal sector to dominate with little intervention to ensure equity.” Indeed, the informal sector—nimble, tax-averse, and unshackled by regulatory costs—has tightened its grip on the economy. As formal businesses crumble, the informal market flourishes, offering goods at far lower prices. Free from the weight of licensing fees, statutory levies, and tax obligations, informal traders have outpaced their formal competitors, pushing them to the edge of irrelevance. Retailers are suffocating under excessive compliance demands. There are more than 15 separate licenses required to operate a formal retail business. The cost of compliance often outstrips profits. It is a slow financial strangulation. Cash is King: The IMTT’s unintended consequences The Intermediated Money Transfer Tax (IMTT), initially introduced to increase tax revenues, has backfired spectacularly. The levy on electronic transactions has driven consumers into the waiting arms of the informal cash-based economy. Most transactions now occur outside formal banking channels. This has exacerbated liquidity shortages, further shrinking revenues for formal retailers who rely on digital transactions. Without foot traffic, without liquidity, without a fighting chance—formal businesses are imploding. OK Zimbabwe: A titanic on the verge of iceberg impact Even retail stalwart OK Zimbabwe is not immune to the storm. Margaret Munyuru, the company’s Group Secretary, acknowledges the grim reality: “…the formal retail sector has been adversely impacted by a volatile operating environment. We are actively engaged with our suppliers and key stakeholders, including industry associations and regulators, to restore supplies to normal levels whilst working on solutions that stabilize the trading environment.” The words are diplomatic, but the undertone is clear. Survival is no longer guaranteed. Government’s deafening silence Despite the mounting crisis, government intervention has been sluggish at best, absent at worst. The CZR has made a desperate plea to President Emmerson Mnangagwa, urging immediate intervention. The sector cannot afford half-measures. The authorities, however, continue to paint a rosy picture of the economy. Their version of events is one of resilience and recovery. But the reality on the ground tells a different story. Retailers and wholesalers are drowning, and the life raft remains elusive. What Lies Ahead? The road to resuscitation The sector stands at a crossroads. Without swift, decisive action, Zimbabwe’s formal retail industry could fade into irrelevance, replaced entirely by an unregulated shadow economy. Urgent interventions required: Currency stability – A clear, predictable monetary policy is needed to restore confidence in the ZiG. Tax reforms – The IMTT needs reevaluation. Taxation should not drive commerce underground. Regulatory streamlining – excessive licensing fees and bureaucratic red tape must be slashed. Leveling the playing field – The government must ensure that the informal sector does not undercut formal businesses through unchecked tax evasion. Consumer confidence restoration – With inflation skyrocketing, stabilizing prices should be a top priority. Will the Government Act? The clock is ticking. Every closed store, every abandoned retail space, every retrenched worker—these are alarm bells. The government must choose between intervention or inaction, between policy reform or further economic decay. The fate of Zimbabwe’s formal retail and wholesale sector hangs precariously in the balance. The question remains: Will the lifeline come in time?

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Retailers: The crumbling pillar of Zim’s commerce on the brink

……as the invisible hand of economic turmoil is reshaping the retail landscape

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