Retailers battle weak demand, cautionary on outlook

HARARE – Retailers are facing a myriad of challenges that have periodically continued to threaten business viability. The Zimbabwean economy has generally been depressed for several years now and the advent of COVID-19 worsened the situation as government responded by imposing lockdown measures that saw businesses losing a lot of trading hours.

Beginning March 2021, lockdown measures were relaxed while the narrative on the economy has in large, or in some parts changed in the positive direction as key economic indicators such as inflation maintains a downward trend which could make government’s target of below 10 percent annual inflation by year-end achievable.

Despite these developments, retailers say that they are not out of the woods yet as demand is still weak.

In a report published last week, the Confederation of Zimbabwe Retailers (CZR), said that while annual inflation declined significantly from 838% in July 2020 to the last recorded 194% in April 2021, the rate is still very high and far from the 10% which is associated with ideal economic stability.

‘While some retail subsectors recorded some modicum of positive prospects, the general sentiments are still far from the pre-pandemic levels,” CZR said.

“It is our observation that the operating environment continues to be affected by local currency inflationary pressures, the decline in disposable income due to unemployment and underemployment, reduced incomes; and the ongoing COVID-19 related cost and inefficiencies which continue to periodically affect global supply chains, while the real cost-push effects of transitioning out of a hyper-inflationary environment has required continual evaluation and adjustment of the retail players’ business models.”

While acknowledging that bumper harvests this year will help improve economic activity through reducing the food import bill and stabilise prices, CZR was cautionary on outlook highlighting that the inherent complexities remain.

“As we look to the year ahead, we remain optimistic by government to intensify the vaccination programme to the point of achieving herd immunity will help improve economic activity,” CZR said.

“We, however, expect the growth to remain modest, with real impact likely to be felt in early 2022.”

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