By Own Correspondent
A tide of massive job cuts is looming in the retail sector owing to declining demand which also comes on the back of the sector’s rapid informalisation.
The country’s retail sector is among the largest employers consuming from both laymen workers up to high end professionals.
But speaking to The Worker recently the Confederation of Zimbabwe Retailers (CZR) president Denford Mutashu said all was unwell in the sector.
He blamed dwindling consumer demand and the rapid informalisation of the sector as chief among the causes behind the current challenges.
“Due to the decline of Zim$ sales the majority of people buying in formal supermarkets are the employed class and they normally earn local currency in Zim$. What we are seeing now is a very difficult situation.
“As of last month when we were doing some market engagements with the respective players and their supply chain, there is a huge outcry with some now contemplating cutting jobs because the operating environment is not quite sustainable to keep the jobs and sustain the wage levels,” he said.
He said while the reforms are bringing forth some form of stability, the recent moves to cut back on money supply through measures such as hiking interest rates have had an adverse impact calling for the need for more work to be done to boost demand.
“We now have a situation where there is semblance of stability .We have seen prices of basic commodities climbing down and we also saw stabilization of the exchange rate , near convergence of the official and parallel market exchange rate so we believe that near stability is something very positive in the economy and very positive to the consumers.
“Even though there is work that is supposed to be done to stimulate demand.
“The US$ sales have improved but of course not to the levels we would anticipate because the shadow market apparently has grown at a much faster rate than the formal economy. So we have got that structure of our economy which shrinks the formal sector,” he said.