By Business Reporter-Zimbabwe’s retail sector is on the brink of collapse as major chains and outlets struggle to stay afloat in an increasingly hostile economic environment.

The latest casualty is N Richards, which recently closed its Hatcliffe and Tynwald outlets, signalling deeper cracks in the formal retail sector. 

These closures come amid a worsening currency crisis, leaving many retailers unable to restock shelves or keep their doors open.

Established brands like OK Zimbabwe are reportedly grappling with restocking challenges as the Zimbabwean dollar (ZWL) continues to lose value against the US dollar. 

The Confederation of Zimbabwe Retailers (CZR) has raised alarm over the sector’s viability, blaming the dual currency system for forcing retailers to accept ZiG payments while sourcing supplies in US dollars.

The crisis has not spared major players:

• Spar Zimbabwe recently shuttered its Queensdale branch.
• Choppies Zimbabwe exited the market entirely.
• Mahommed Mussa reduced its retail space by 60%.

In a statement, CZR lamented the ongoing closures, warning of dire consequences for the formal economy:

“The continued collapse of formal retail and wholesale businesses underscores the crisis. The fiscal, monetary, regulatory, and statutory frameworks have created an uneven playing field. While formal businesses crumble, the informal sector thrives unchecked, eroding market share.”

Zimbabwe’s formal retail sector is also struggling to compete with the unregulated informal market, which benefits from tax evasion, lower operational costs, and non-compliance with labor laws.

This wave of closures harks back to the 2008 hyperinflation crisis, when the Zimbabwean dollar collapsed and businesses shut down en masse.

Today, skyrocketing operational costs and dwindling consumer purchasing power are pushing the formal sector closer to the edge.

The CZR has called on President Emmerson Mnangagwa to urgently stabilize the economy and protect the formal sector from further collapse. 

Without decisive intervention, Zimbabwe risks a repeat of its economic nightmare, leaving formal retailers in the dust while the informal market thrives unchecked.

The closure of N Richards’ two outlets is yet another grim reminder of the worsening economic turmoil and the uncertain future of formal businesses in the country.