By Business Reporter- Zimbabwe’s retail sector is reeling under immense pressure, with several major retail chains—including N. Richards, Spar, and OK Zimbabwe—shutting down branches due to the worsening economic crisis.
The situation has reignited calls from industry and commerce sectors for urgent government intervention to salvage the collapsing economy.
The formal retail sector has been grappling with a host of challenges, including high inflation, a depreciating local currency, foreign currency shortages, and stiff competition from a booming informal market.
The introduction of the Zimbabwe Gold (ZiG) currency has further complicated the economic landscape, triggering uncertainty and disrupting trade flows.
In recent months, major retailers have struggled to stay afloat.
OK Zimbabwe, one of the country’s largest supermarket chains, has been forced to close several outlets, citing dwindling revenues and rising operational costs.
Spar, another leading retailer, has also downscaled operations, with some franchisees shutting down completely due to unsustainable business conditions.
N. Richards Group, which primarily serves as a wholesaler, has faced similar pressures, with a shrinking customer base as informal traders increasingly source their stock through alternative channels.
These closures reflect deeper economic turmoil in Zimbabwe, where formal businesses are finding it difficult to compete with an ever-expanding informal sector that operates largely outside the tax system.
In an interview with NewsDay this week, Zimbabwe National Chamber of Commerce (ZNCC) president Tapiwa Karoro attributed part of the problem to the government’s taxation policies.
He pointed out that the recently introduced 5% withholding tax on non-registered micro, small, and medium enterprises (MSMEs) has discouraged informal traders from purchasing goods through formal wholesalers.
This has driven more transactions underground, depriving the formal economy of much-needed revenue and further squeezing legitimate businesses.
“This has resulted in low tax compliance, reduced productivity, constrained investment, and limited access to social security benefits,” Karoro said. “While the tax measure seeks to enforce compliance, it has inadvertently discouraged informal traders from engaging with formal wholesalers, thereby pushing more transactions into the black market.”
Karoro urged the government to consider a graduated tax structure with lower initial rates to incentivize businesses to register formally.
He emphasized that formalizing the economy is crucial for sustainable economic growth, increased tax revenue, improved business productivity, and greater investor confidence.
The Consumer Council of Zimbabwe (CCZ) has also raised concerns over increasing retail closures.
In a statement this week, the CCZ highlighted that the dominance of informal traders—who often evade taxes and operate without overhead costs—has created an uneven playing field, making it difficult for formal retailers to survive.
“The continued shutdown of formal retailers and wholesalers is a worrying trend that affects consumer choice, product quality, and overall economic stability,” the CCZ statement read. “Many consumers rely on structured retail outlets for price stability and quality assurance. Their collapse could lead to unregulated markets, price distortions, and potential consumer exploitation.”
To address these challenges, industry experts have called for a multi-pronged approach involving incentives, regulatory reforms, enforcement mechanisms, and digital transformation.
They argue that a balanced and inclusive economic environment is essential to reversing the current decline of the retail sector.