The informal retail sector in Zimbabwe is thriving, while large-scale retailers face mounting challenges due to currency distortions and pricing strategies, according to Buy Zimbabwe Chairman Munyaradzi Hwengwere.
Speaking on the current economic climate, Hwengwere highlighted the impact of informalization on the retail industry, with consumers increasingly turning to smaller, informal shops for more affordable goods.
“We’re not yet at a point where the distortion between the official exchange rate and the parallel market has been eliminated,” Hwengwere said, noting how this disparity exacerbates operational difficulties for large retailers.
While manufacturers appear to be navigating the currency challenges more effectively, Hwengwere pointed out that some large retailers’ pricing practices have contributed to their woes.
“A 10kg packet of mealie-meal priced at $20 in large-scale retailers can cost just $9 in informal shops,” he explained.
In efforts to mitigate currency gaps, large-scale retailers have made themselves more expensive, pushing consumers away, he added.
To restore viability, Hwengwere urged a reevaluation of pricing models and a closer look at the currency distortions that disproportionately affect the formal retail sector.
