THE Confederation of Zimbabwe Retailers (CZR) has called on the government and other players to engage in constructive dialogue to address the pricing strategies in the country’s formal sector.
The call comes as prices of basic commodities have been rising recently, directly impacting the general public who are already struggling with low disposable income.
CZR president Denford Mutashu said the sector was navigating an environment where businesses must constantly adjust to the fluctuating exchange rate, foreign currency shortages and inflationary pressures thereby impacting on pricing.
“At this stage, it is critical to understand that the pricing strategies employed by the retail and wholesale sectors are not driven by profiteering but by the need to survive under exceedingly challenging conditions,” Mutashu said in a statement released last week.
He said the current trajectory was “unsustainable” and without meaningful intervention, “we risk further closures and economic stagnation”.
Mutashu said the exchange rate has been the major problem in the pricing of goods by businesses as it appeared to be artificially fixed.
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“Most suppliers are demanding payment in a USD to ZiG ratio of 80:20, while others impose a heavy premium on goods sold in the local currency. This means retailers and wholesalers must either source goods with a majority USD payment or absorb the inflated cost of goods priced in Zimbabwean dollars,” he said.
“The exchange rate, which seems artificially fixed, further complicates matters. The current legal framework, particularly the Exchange Control Act, prohibits pricing goods above the prescribed exchange rate when using ZiG. As a result, retailers and wholesalers are forced to adjust their prices to align with the US dollar equivalent, despite selling primarily in local currency.”
He noted that the retailers and wholesale sectors needed a level playing field to operate fairly within the multi-currency regime and highly regulated economy.
“Retailers and wholesalers should be allowed to trade at market-related exchange rates. This will allow for fair pricing, as the costs of procuring goods in US dollar can be better reflected in the final prices, avoiding distortions created by the current fixed rate,” he said.
“Manufacturers and distributors should prioritise selling goods through formal retail channels to maintain a structured and accountable supply chain. We urge all stakeholders to strengthen partnerships within the supply chain and prevent direct-to-consumer sales that undermine retailers.”
Mutashu suggested that fuel be sold in local currency to retailers as the sector had become more reliant on fuel generators due to constant power cuts.
“The ongoing power shortages have forced retailers to rely heavily on generators, leading to unsustainable fuel costs. We request either fuel provisions in ZiG for retailers or the removal of fuel taxes on diesel to help ease this operational burden. Many businesses are burning through resources just to keep operations running, threatening their viability.”