Zimbabwe’s retail sector registered a 50% decline in sales volumes since the beginning of the year to date, due to Covid-19-induced lockdowns which restricted consumer movement and weakened purchasing power, CITE can reveal. The country experienced its second and more pronounced wave between December 2020 and February 2021, where daily infection rates spiked 270% since December 2020. A hard lock-down was subsequently enforced.
Confederation of Zimbabwe Retailers (CRZ) president Denford Mutashu told the CITE in an interview that the Covid-19 pandemic and the resultant lockdown measures limited trading hours and the movement of people.
“You may appreciate that beginning of the year, we went into the 30-day lockdown…and obviously, it impacted on sales volumes while cost continued to pile up,” Mutashu said.
“Of course, in the spirit of fighting Covid-19, we had to go into a lockdown to prevent the spread of the pandemic. So in the same spirit, we also anticipated that sales volumes were going to be impacted because the movement of consumers was also inhibited.”
“Remember at many times, intercity movement was also not permissible. So it became very difficult to restock and in the absence also for smooth movement of goods from other source countries like China and South Africa, it became very difficult also for the procurement of raw materials, finished goods to replenish stocks,” he said.
Mutashu said at some point they had sold out on many imports.
“So that has also impacted quite negatively on the performance of the sector as a whole. So we have got a scenario where costs have been surging since the beginning of the lockdown in 2020 and of course up to the first quarter of 2021,” he said.
He said a lot of companies have been trying to engage in a survival mode because the sales volumes have negatively plummeted but “if you look at expenses, a lot of retail shops that we spoke with were reporting an average of around 20 to 30% increase in costs and expenses whereas they were operating at around 30% from the beginning of the lockdown in 2021 to the current.”
“The sales volumes actually declined by about more than 50% from the beginning of the year because most were actually reporting sales volumes of around between 30% and 40%. So being conservative, I think we are talking about 50% sales volumes decline,” he said.
The reduction in operating hours constrained activity and disrupted production and supply to many stores. Currency depreciation resulted in frequent price increases in a situation of limited disposable incomes, leading to subdued demand.
Source: Centre for Innovation and Technology