The retail sector has lamented the rejection of the Zimbabwean dollar by some suppliers of certain product lines as this was creating supply gaps owing to foreign currency challenges, Confederation of Zimbabwe Retailers (CZR) has said.
In its Half Year Retail Sector Report, CZR said matters were compounded by the fact that formal retail players accepted both foreign and local currency payments which has made it increasingly difficult to cope with full payment of certain product lines to suppliers in foreign currency.
“We have also observed instances whereby suppliers demand foreign currency for certain product lines, yet we also sell using swipe and mobile money. The rejection of local currency by suppliers of some product lines in favour of hard currency has also resulted in supply hiccups for some retailers,”
The retail sector body also said the situation was encouraging suppliers to distribute some product lines to informal traders who pay them in hard currency, sometimes upfront, creating unfair competition with formal players.
“We therefore call on suppliers to accept local currency from retailers, and for authorities to put mechanisms that enforce that,” said CZR.
The development has been evident in the informal economy were suppliers of goods and services are either setting a premium of local currency payments or rejecting it totally.
The ZWL has been characterized by volatility since its reintroduction in 2019.
The low denomination notes such as the ZWL$ 10 is also out of favor despite calls by the Reserve Bank of Zimbabwe for continuous usage of all national currency.
During the first half of the year, the retail sector also encountered several challenges which include limited trading hours due to lockdown measures put in place by the government, low aggregate demand, rising operating costs and resurgence of power outages among others.
“The increased load-shedding experienced over the past few months presented huge challenges as most players were forced to rely on fuel-powered generators which are expensive to run and add to high overheads. Retail operations still require more electricity even if shops are closed, to preserve products that require refrigeration from going stale,” said CZR.
The recent violence and looting in neighboring South Africa also affected retail business.
According to industry players, the events resulted in supply chain disruptions.
“Most retailers failed to receive their goods on time, which they had already paid for from South Africa because of the violent riots and looting. There were lots of delays of more than 72 hours experienced by retailers and wholesalers, which affected the replenishment routine of goods and smooth trading,” said CZR.
On a progressive note, the retail sector has witnessed rapid growth in online retailing since the COVID-19 pandemic started as consumers are increasingly adopting non-contact methods of shopping.
“As incidences of lockdown have left brick and mortar businesses in uncertainty mode, there has been an impetus in online retailing, which also do home deliveries, and large and small retailers are already starting to grow their online store presence,” said the report.
However, the emergence of online retailing has sparked fresh conversations around the need to put supportive mechanisms required for reliable locally-made software, affordable internet, and network infrastructure and cyber security to avoid being hacked.
Some incidences of email hackers targeting huge businesses were registered this year, which raises concerns for cyber security.
