Retail thrives in dollarised economy

BULAWAYO Retailing basic commodities has become the mainstay of economic activity as the economy remains unresponsive to government initiatives to jump-start sectors weighed down by years of stagnation in a hostile trading environment.

(Pictured: Foreign Currency Till as Most supermarkets trade in foreign cur

Self-employed bricklayer Richard Nyoni, 30, stood surprised on the pavement when he found his favourite hardware shop turned into a supermarket filled to the hatches with a wide variety of imported South African products ranging from orange crush, cornflakes, sugar and salt to toothpicks and toilet paper.

Business was beginning to pick up this year for us from clients renovating their premises. I never expected this hardware shop would be converted into a supermarket overnight, Nyoni told The Zimbabwean. It means the material we require becomes hard to come by and limits our choice of suppliers.

Nyoni feared a large part of the city would soon be dominated by supermarkets.
Bulawayo, which used to be Zimbabwes industrial hub during the pre-independence era, suffered serious de-industrialisation from a flight of large companies which relocated to Harare. The situation has been worsened by a 10-year economic recession and lack of new investments.

In January this year the Zimbabwean government went a step further to officially adopt the use of multiple currencies after the spectacular collapse of the national currency following the removal of exercise duty on imported food items to stem serious food shortages mid-last year.

All retailers and wholesalers are selling their merchandise in South African Rand, Botswana Pula and American Dollar.
Supermarkets that were lying fallow immediately started filling up their shelves.
Groceries are the fast moving lines, said business man, George Ndlovu.
Ndlovu converted his electrical goods and furniture shop into a supermarket a fortnight ago in order to remain in business. He terms the conversion into another line of business diversification.

Few people could afford durable household goods such as furniture and electrical gadgets and opted to feed their families first ahead of buying luxury goods, he explained adding: Setting up supermarkets is a growing trend in the city.
A few months ago almost one in every five or so retail shops along the citys streets was boarded up; displaying signs that informed potential customers the premises were closed for renovations.

Hard-pressed owners complained of a steep decline in business due to their inability to restock under stringent price controls in a hyperinflationary environment. Before the adoption of multiple a currencies, inflation was officially put at 231 million per cent.
Emily Zhou of Mpopoma, a working class suburb, welcomed the large number of supermarkets in the city for bringing down prices.

It has helped bring down prices, even though foreign currency is hard to come by, said the 36-year old housewife.
But researcher, Caryn Abrahams, of the University of Edinburgh contends that Zimbabwes decision to legalise trade in foreign currency was not benefiting urban consumers.

Abrahams said the retail of foreign goods in Zimbabwe only benefited governments abroad and companies exporting products into the country and selling them in hard currency.

“Who are the residents who have the means and choice to buy in US dollars or travel to South Africa to shop? It’s certainly not the ordinary urban resident earning US$100 a month, she argued in a discussion paper recently.

Post published in: Economy

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