News / National
High Cost Of Doing Business Choking Retailers
30 Aug 2015 at 07:32hrs | Views
File photo of an empty wallet
The Confederation of Zimbabwe Retailers has said the high cost of doing business in Zimbabwe is seriously choking retailers.
In a statement CZR said it is deepily concerned about the stagnation and in most times consistent decline in sales owing to a number of challenges that, chief among them, liquidity constraints, low disposable incomes and evaporation of workforce base due to the current wandon retrenchments.
"The high cost of doing business has not helped matters as commercial rentals have had a serious knock on viability of many businesses. The high average of US$20,00 per square meter is not sustainable in the current environment," reads the statement.
"The government is called upon to intervene and probe the property sector with a view of finding a solution to the current scourge. The high rate of defaulters is a clear indication of how urgent and dire the issue has to be tackled. Its not making any business sense for retailers to end up parting with their personal properties in order to finance a rent arrears obligation."
The organisation said retailers are law abiding and willing to meet their rental obligation , but have now been squashed between a rock and a hard surface.
"Most have been forced out of business already while some ended up resorting to vending ,which does not sustain the economy in the long run. The retail sector is a business which is currently stifled by very low margins and it becomes very difficult to pass on the costs to the already struggling consumer," CZR said.
"It is also disheartening that most landlords are not resident in Zimbabwe and have their properties managed by Estate agents some of whom are overzealous and refuse to put on a human face to their business approach. Imagine a very small shop at the gulf complex in Harare's CBD of about 50 square meters going for a hooping monthly rental fare of US$700.00?"
CZR said the property owner is alleged to be Tanzainian and has secured the shopping complex with lockable steel gates and closes at 17:45hrs from Monday to Friday while closing at 17:00hrs Saturdays.
"This is the peak hour for most of the shops but are forced to close because thats the stipulated trading hours that are never explained in the lease agreements," CZR said.
"The tenant has to pay additional US$50.00 for security guards, average of US$100.00 for 'rates' that one never has access to the documentation. And to imagine these are all costs going to the retail space only. Factor in the 'one size fits all' council shop licences , wages and salaries."
The organisation said the above scenario is just a small real life example that depicts the general conditions under which retailers have been forced to operate in.
"There is general belief premised on malice and greedy by most landlords and property managers that retailers make huge and super normal profits and are not just willing to pay their rentals," the organisation said.
"That is absurd and the problem also is compounded by most property managers/ agents who have to make a living from the same property and ending up putting a high markup. This greediness has also spread to residential property owners who are also charging an average of US$70.00 per room and some charge per number of occupancy. One is forced to buy 'extras' for the landlord. This is a vicious with a tendency of increasing the rate its swallowing ordinary people into abject poverty."
CZR said there is urgent need to revisit this critical human and business life issue, that's if it ever was visited before.Commercial office space, shop space, retail space and residential space is beyond the reach of many yet its so critical to human life.
Meanwhile, the Confederation of Zimbabwe Retailers said it is happy to announce that,it has signed a mega housing deal with a local property consortium that will see its CZR members and their staff members access residential and commercial stands at very affordable prices and be able to pay over a long period under this low-cost housing scheme.
"The CZR will strive to find solutions to the challenges that retailers face .However, we call upon the government to immediately look into the issue of unsustainable rentals in major towns and cities," reads the statement.
In a statement CZR said it is deepily concerned about the stagnation and in most times consistent decline in sales owing to a number of challenges that, chief among them, liquidity constraints, low disposable incomes and evaporation of workforce base due to the current wandon retrenchments.
"The high cost of doing business has not helped matters as commercial rentals have had a serious knock on viability of many businesses. The high average of US$20,00 per square meter is not sustainable in the current environment," reads the statement.
"The government is called upon to intervene and probe the property sector with a view of finding a solution to the current scourge. The high rate of defaulters is a clear indication of how urgent and dire the issue has to be tackled. Its not making any business sense for retailers to end up parting with their personal properties in order to finance a rent arrears obligation."
The organisation said retailers are law abiding and willing to meet their rental obligation , but have now been squashed between a rock and a hard surface.
"Most have been forced out of business already while some ended up resorting to vending ,which does not sustain the economy in the long run. The retail sector is a business which is currently stifled by very low margins and it becomes very difficult to pass on the costs to the already struggling consumer," CZR said.
"It is also disheartening that most landlords are not resident in Zimbabwe and have their properties managed by Estate agents some of whom are overzealous and refuse to put on a human face to their business approach. Imagine a very small shop at the gulf complex in Harare's CBD of about 50 square meters going for a hooping monthly rental fare of US$700.00?"
CZR said the property owner is alleged to be Tanzainian and has secured the shopping complex with lockable steel gates and closes at 17:45hrs from Monday to Friday while closing at 17:00hrs Saturdays.
"This is the peak hour for most of the shops but are forced to close because thats the stipulated trading hours that are never explained in the lease agreements," CZR said.
"The tenant has to pay additional US$50.00 for security guards, average of US$100.00 for 'rates' that one never has access to the documentation. And to imagine these are all costs going to the retail space only. Factor in the 'one size fits all' council shop licences , wages and salaries."
The organisation said the above scenario is just a small real life example that depicts the general conditions under which retailers have been forced to operate in.
"There is general belief premised on malice and greedy by most landlords and property managers that retailers make huge and super normal profits and are not just willing to pay their rentals," the organisation said.
"That is absurd and the problem also is compounded by most property managers/ agents who have to make a living from the same property and ending up putting a high markup. This greediness has also spread to residential property owners who are also charging an average of US$70.00 per room and some charge per number of occupancy. One is forced to buy 'extras' for the landlord. This is a vicious with a tendency of increasing the rate its swallowing ordinary people into abject poverty."
CZR said there is urgent need to revisit this critical human and business life issue, that's if it ever was visited before.Commercial office space, shop space, retail space and residential space is beyond the reach of many yet its so critical to human life.
Meanwhile, the Confederation of Zimbabwe Retailers said it is happy to announce that,it has signed a mega housing deal with a local property consortium that will see its CZR members and their staff members access residential and commercial stands at very affordable prices and be able to pay over a long period under this low-cost housing scheme.
"The CZR will strive to find solutions to the challenges that retailers face .However, we call upon the government to immediately look into the issue of unsustainable rentals in major towns and cities," reads the statement.
Source - Byo24News
