Zimbabwe’s retail sector grapples with viability challenges amid price volatility
HARARE – The Government of Zimbabwe has acknowledged that the retail sector faced significant headwinds between January and March 2025, experiencing widespread viability challenges that led to branch closures, destocking, and reduced operations for some outlets.
Addressing the media during a post cabinet briefing on Tuesday, Information Minister Jenfan Muswere, highlighted the intricate relationship between basic commodity prices and exchange rate fluctuations in the country.
The Ministry of Industry and Commerce routinely monitors the prices and availability of 14 essential goods, including mealie-meal, cooking oil, bread, and sugar, with the aim of protecting consumer welfare.
The government noted a positive development in narrowing the gap between the official and parallel market exchange rates during the reviewed period. Additionally, local products reportedly continue to hold a dominant presence on shelves in both formal and informal retail spaces.
The briefing, however, revealed a concerning trend of hardship within the wholesale and retail sectors. The Minister said the viability challenges have manifested in tangible ways, impacting the operational capacity and geographical footprint of some businesses.
In response to potential non-compliance, the Ministry of Industry and Commerce conducted inspections, resulting in 137 prosecutions, the issuance of 245 compliance notices, and the seizure of 3,427 units of various products.
“The surveys target 14 basic commodities namely: mealie-meal, laundry soap, cooking oil, bread, sugar, flour, rice, bath soap, washing powder, powdered/fresh milk, eggs, beef, chicken and salt.
“The public is advised that there is a positive correlation between the movements in the prices of basic commodities and exchange rate movements,” Muswere noted.
“On a positive note, the gap between the official and parallel market rates has been narrowed during the period under review. It has also been observed that local products continue to dominate shelf space in both the formal and informal sector outlets.
“The period under review witnessed the wholesale and retail sectors facing significant viability challenges resulting in branch closures, destocking and reduced operations by some of the retail outlets.
“Compliance inspections undertaken by the Ministry have resulted in 137 prosecutions, issuance of 245 compliance notices and the seizure of 3 427 units of different products.
“The current tight Monetary Policy is yielding results in the containment of inflationary pressures and maintaining exchange rate and price stability.”
Last month, the Zimbabwean government repealed the restrictive Statutory Instrument 81A of 2024, which had compelled formal retailers to price goods based on the unfavorable official interbank exchange rate.
The action came after the gazetting of Statutory Instrument 34 of 2025 on April 15, 2025.
The now-revoked SI 81A, enacted under the Exchange Control Act, had put formal retailers at a disadvantage compared to informal traders who often used parallel market rates and operated outside the tax system.
Major retailers like OK Zimbabwe Limited, N Richards Group, Spar, and Pick n Pay had been significantly impacted, leading to numerous store closures nationwide.
The government’s decision to repeal the legislation appeared to stem from increasing concerns about the potential collapse of the formal retail sector due to these competitive pressures.
