Temporary Night "Shops" Take Over Zimbabwe's Retail Sector
Supermarkets in Zimbabwe are struggling to survive as the volatility of the new currency pushes prices up, leading shoppers to opt for cheaper informal markets that appear at night to avoid authorities.
These temporary shops, which pop up on sidewalks, store verandas, and car parking spaces, offer a wide range of goods, including groceries, fresh meat, electronics, clothes, medicines, fashion accessories, and stationery.
These vendors do not face expenses such as rising energy costs, taxes, or laws that force formal retailers to accept the local currency at artificially low official exchange rates.
As a result, they can offer bargains. For example, a box of juice that sells for $3 in a supermarket costs half of that on the street.
Batsirai Pabwe told the Associated Press that he enjoyed shopping on the streets after managing to fill a plastic bag with items for just $20.
For the same amount in a supermarket a week ago, he said he could only get “meat and spices, and they were not even that much.”
In April, Zimbabwe introduced a new gold-backed currency called ZiG (short for Zimbabwe Gold) to replace one that had depreciated and was often outright rejected by the people.
This is the country’s sixth attempt at a new currency since the 2009 collapse of the Zimbabwe dollar and the adoption of the U.S. dollar as legal tender amid hyperinflation.
The U.S. dollar has remained legal tender alongside successive local currencies. The latest currency, introduced with much pomp and fanfare, included promotional jingles and songs played on public radio, television, and online.
However, seven months on, the ZiG appears to be failing like its predecessors. The gap between official and black market exchange rates continues to widen, with many people and informal traders preferring the more stable dollar.
Traditional stores, required by authorities to charge using the local currency, are increasing prices to stay afloat.
However, they have become uncompetitive compared to unregulated informal markets. The Retailers Association of Zimbabwe warned of potential store closures, describing the situation as “clearly untenable.”
In October, Pick n Pay, one of Africa’s biggest grocery chains that operates more than 70 stores jointly with a local partner in Zimbabwe, said that it had “impaired” its investment in Zimbabwe “to a book value of zero” because of the “deteriorating economic conditions.”
Gift Mugano, an economics professor, said the exchange rate crisis has negatively impacted traditional stores. He said:
In every transaction business is doing in the formal setup, it’s making an exchange rate loss that cannot be compensated. The major issue here is a currency crisis.
Everything is against their survival. The informal sector works at night, (if there is) no electricity they use their phones, they don’t care. They are there for survival.
According to official figures and the International Labour Organisation, over 80% of Zimbabwe’s employable population relies on the informal sector for their livelihoods.
More: Pindula News
