Retail sales volumes drop . . . Price hikes weaken consumer spending
Pride Mahlangu, Business Reporter
THE Confederation of Zimbabwe Retailers (CZR) says sales volumes in the sector have dropped by about 40 percent due to weakening consumer spending and rising inflation.
CZR president, Mr Denford Mutashu, said yesterday that although retailers were blamed for the spate of price increases, the sector was actually suffering loss of business due to reduced volumes and rising cost of doing business.
“The general demand has dropped by 40 per cent. The volumes have actually gone down by 60 percent for high-value items (non-basic goods).
“On buying groceries the high-value items or non-essential products have been affected because we have demand dropping by more than 50 per cent while on electrical gadgets it’s about 60 per cent. On the basic commodities or non-essential commodities demand is still going down by about 40 percent,” said Mr Mutashu.
He said the decline in volumes was largely linked to the loss of value for the local currency against other currencies like the rand and US dollar, which has resulted in severe erosion of wages.
Mr Mutashu, however, said increase in demand was only seen on goods that are usually scarce like bread, which is usually bought in large quantities usually out of panic with vendors wanting to sell it on the informal market.
He said CZR was doing its best to contain price increases through engaging with players to avoid manipulating the environment and shortchanging consumers. He also revealed that retailers were battling an increase in the cost of doing business.
“The costs have actually increased by about 70 percent and we are talking about increase in costs especially for maintenance and repairs for bakery equipment, electrical equipment, delicatessen departments, tills and also the cost of packaging etcetera,” he said.
Consumers have repeatedly expressed frustration over the escalating prices at a time when their earnings were not matching the prevailing costs. Economists have blamed price increases on the rising foreign currency exchange rates. Yesterday the US$-Z$ exchange rate was at 1:16 on the interbank market. — @pridesinstinctz.