Zimbabwe retailers in major price climbdown

THE price hike madness that had manifested in the country in recent weeks appears to be dissipating with some of the major players in the economy starting to see reason following the gazetting of Statutory Instrument (SI) 142 of 2019, which outlawed the use of the multi-currency system and reintroduced the Zimbabwe dollar.

Innscor Africa Limited's Simbisa Brands, which had been caught up in the price increase craze, recently announced that it had slashed prices in its fast food range. It said the price for its Chicken Inn two-piecer had dropped from $25 to $20 while that of their Bucket Meal was slashed by $15 from $75. Pizza Inn reduced the price of its  large classic pizza from $60 to $48 and its Mega Classic Pizza was lowered by $18 from the previous $90.

One of the country's leading supermarket chains, OK Zimbabwe, followed suit and also issued a statement to announce a downward price review following the scrapping of the multi-currency system by Government.

"In recent months, prices of goods and services in the formal market were spiralling upwards largely triggered by the parallel market exchange rates. The Zimbabwe National Statistics Agency has said the country's month-on-month inflation rate increased by 7,02 percentage points in May to 12,54 percent from 5,52 percent in April," reads the statement.

"OK Zimbabwe is grateful for the support and patronage of all our customers. Your support and patronage particularly in these difficult times is specially appreciated. We are proud to be the leading Zimbabwean retail and supermarket chain and we strive to ensure that you will continue to get value from our stores."

Some of the commodities whose prices have significantly gone down are Mazoe Orange Crush (2l) which went from $21 down to $16, Cerevita from $13 to $9.

CZI president Mr Denford Mutashu said the reduction in prices is expected to continue as more suppliers follow suit.

"The fall of prices was a decision made by different players after parallel market and interbank rates tumbled following the scrapping of the multi-currency system.

"Prices started to come down especially after the parallel market fell. Although the movement was slow, it was something that we welcomed," he said.

"We expect positive response from value chain players. Other players should follow on. We have seen huge retailers and wholesalers that have reduced prices like N. Richards with over 31 outlets countrywide, Mahomed Mussa, Eat and Lick, Chicken Inn, Spar Zimbabwe, Food World and Choppies.

"Pote in Zvishavane, Gonye retail in Chipinge, Pachedu in Mt Darwin also followed suit. When those flagship brands reduce their prices we expect other small shops to do so." Mr Mutashu, however, took a swipe at unregistered retailers for remaining defiant.

"We are not happy with a lot of small and medium players, especially tuckshops in the downtown areas that are not playing ball. Motor spare parts shops should also change their attitudes instead of decreasing prices they had actually increased them by between 100 to 150 percent," he said.

Mr Mutashu, however, challenged retailers to reduce prices across the board and not only on selected items.

"TV Sales has reduced prices on selected items; we expect more. The rate of decline is still very small, but we anticipate an improvement as some businesses had adopted a wait-and-see approach. It is, however, commendable that Chinese-run shops are also charging in local currency and accepting all forms of payment."

Consumer Council of Zimbabwe executive director Ms Rosemary Siyachitema declined to comment.

The reduction in prices is in line with Finance and Economic Development Minister Professor Mthuli Ncube announcement last month that prices should start falling this month due to Government fiscal consolidation measures and other initiatives.