New Zimbabwe.com

Retailers in trouble as wholesalers use vendors to undercut them

By Staff Reporter


MUTARE: Retail outlets in the eastern border city, may be forced to reduce their prices if they are to stay afloat after vendors reportedly contracted by wholesalers have flooded the streets with cheaper commodities.

A survey conducted by this publication has shown that most locally manufactured basic commodities such as washing soap, salt, sugar, cooking oil, bathing soap, flour were now being sold in the street in the Central Business District (CBD) at cheaper prices as compared to major retail shops.

In the street a 2 kilogramme of sugar is being sold for ZWL$9, 2litres bottle of concentrated cordials $15ZWL, $10 for green bar while a 2litre bottle of cooking oil costs $16.

This is in contrast with the steep prices for the same commodities in traditional supermarkets.

In major retail shops such as TM,OK and Spar, a 2litre of cooking oil is being sold at ZWL$22, 2litre bottle of concentrated cordials $22, green bar $11 and 2kgs brown sugar ZWL$14. A 2 kilogramme packets of chicken cutlets is being sold for ZWL$26 while the vendors are selling the same product for ZWL$20.

Vendors interviewed by this publication claimed they have been sub-contracted by local wholesalers who were frustrated by retailers charging astronomical prices resulting in business slowing down.

Tariro Makanga (27) said she is working for a local wholesaler for a commission.

“Every day I get three boxes of cooking oil, three cases of sugar and a cartoon of washing soap. I sell the stuff and at the end of day I remit the principal money and deduct my commission. I am making a living because people now opt to buy from us than retailers who are charging exorbitant prices,” said Makanga.

She said apart from locals, their biggest buyers where Mozambicans who were crossing into the country to buy basics such as sugar and milk.

Another vendor Rudo Matangira (40) concurred adding that although they have to play cat and mouse games with the council police, their business was thriving.

“Although the municipal police are chasing us from the streets, even police officers in uniform are coming to buy from us. Retail shops are expensive and people want our products,” said Matangira, adding that she was pocketing ZWL$90 commission daily.

A shop manager, who identified himself Murapa said business has gone down as locals were opting to buy in the streets where commodities are affordable.

“We are in trouble as you can see the shop is empty customers are shopping in the pavements. Our management should sit down and re-strategise or else we will be forced to retrench or close shop. Our products are overpriced and manufacturers are not happy with the current turnaround period,” said Murapa.

A supervisor for an Asian business owned wholesale shop, Andrego Pedro said they are being forced to contract street agents to push volumes because the turnaround period for retailers is now long.

“You find retailers are overpricing goods and people are no longer buying as they use to. As a survival strategy we have to find agents to sell some stuff for a commission. In this case, we are using a small profit quick return policy. It`s hard but there is nothing we can do we need to survive,” he said.

Gift Mugano, an economist with Africa Economist Development Strategies (AEDS) said if the price hikes continued in the next two months, no manufacturer or retailer will have the capacity to continue.

“If we don’t restrain ourselves and continue increasing prices, we will reach a plateau and this result in the collapse of economy,” said Magano.

President Emmerson Mnangagwa lashed out at retailers who he described as “mercenaries.”