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Nqobile Bhebhe, [email protected]

DIVERSIFIED business group, Ngamla Professionals (Private) Limited, says it closed its retail division at Nkulumane Shopping Mall in Bulawayo due to an unfavourable trading environment mainly posed by the influx of informal traders in the sector.

In January, Ngamla Supermarket, which relocated from the central business district in Bulawayo to Nkulumane Shopping Mall closed down as it was no longer sustainable to run the business, its proprietor, Mr Mpumelelo Phiri, has said.

The retail and wholesale shop also had a bakery, butchery, and ice cream bar under one roof. Mr Phiri yesterday said players in the formal retail sector are feeling the pressure exerted by informal retailers who hardly have statutory obligations to settle.

Major retail players from diverse sections of the economy such as food, clothing, textile, and footwear, have fallen victim to the sprawling informal sector and have since exhorted the Government to bring the situation under control before it buries the once vibrant formal sector.

This is bleeding the fiscus and the situation is fast deteriorating, analysts say.  Some locally manufactured grocery items are found plentifully on vendors’ stalls and downtown shops, as these selling points are magnets to the abundantly circulating US dollars.

Mr Phiri said he decided to close the retail outlet and focus on other business interests.“When I was operating several small retail shops, I was doing well and then decided to open a bigger supermarket in Nkulumane Complex. I considered that as growth,” he said.

“By relocating to Nkulumane, we had set objectives, which at the time pointed to a profitable business.
“However, we later realised that the outlet was not making profits and was now draining capital from other business entities. It was a mistake,” said Mr Phiri.

“Nkulumane Complex has little traffic and operational costs are high. For instance, we were spending between US$700-800 a day on diesel to power generators, about US$12 000 per month on salaries, US$6 500 on rentals and a further US$6 500 on operations per month. Other statutory obligations also needed to be met.

“So, about US$50 000 per month was needed to run the outlet and the shop was not making that amount. I kept pumping in money from other business interests and then reached a point of saying ‘this was not viable’. You cannot run a business on a negative balance for over a year,” said Mr Phiri.

“Therefore, in January, I made a business decision to pull out of the retail sector as it was no longer viable and was affecting other business interests. I closed the shop. I was committing financial resources from other business interests and that was affecting their operations.”

Mr Phiri said negotiations with all creditors are ongoing and were pointing to an amicable solution.
“There are papers served by creditors but there is no judgment yet. We are still negotiating with each other on payment plans and resolution will be reached soon,” he said.

Observers say the effects of an informalised economy are widespread and this has seen shrinking volumes uptake in formal retail stores. The informalisation trend is cross-cutting as even hardware shops are battling with enterprises that are rampantly importing non-duty-paying stock for sale.
Textile shops have not been spared from this growing cancer.

The Nkulumane Shopping Mall, which was part of the city’s council strategy to decongest the city centre in the 1990s, has become a pale shadow of its former self, with most of the shops in the facility unoccupied.

At its prime, it used to house giant retail shops in the country such as Pick-n-Pay and OK while several banks were also housed in the same facility.