13 January 2013

Zimbabwe: Oversubscribed Byo Retail Sector Crumbles

BULAWAYO'S retail sector has virtually collapsed following the closure of several shops and supermarkets in the city centre last year.

Retail was the only remaining robust sector following the closure of various companies in the manufacturing and textile industries.

The most affected retail businesses were new shops and supermarkets owned by indigenous people.

Buscod Chain Supermarkets closed its last shop at the end of last month, leaving close to 400 workers jobless.

The company's managing director, Bambo Bambo said the closure was caused by a marked increase in the number of retail supermarket outlets in the city.

This, he said, had made retail business less viable.

"We are therefore getting into those business areas that are little explored such as clothing and that do not need a large number of employees and where competition is less," he said.

Buscod Supermarket emerged at a time when traditional supermarkets were facing operating challenges that saw many of them failing to stock basic commodities.

Another supermarket chain, Tashas Supermarkets closed four of its branches last year, also leaving hundreds of workers unemployed.

The company was placed under judicial management late last year after it failed to settle US$3 million it owed creditors, most of them local banks.

Tashas had 10 outlets in the city and rose to prominence at the height of economic challenges to compete with established supermarkets such as TM and OK.

It was also one of the first supermarkets to import basic commodities from South Africa during the hyperinflationary period.

Tashas Supermarket, which had become a household name in Bulawayo, is also planning on restructuring and diversifying into other lines of business, a source said.

"There is a retail shop in almost every street and at every corner of the town and this makes competition very stiff," said a manager with Tashas who requested anonymity. "Several companies especially in the manufacturing sector closed down in Bulawayo and this also negatively affected our business."

The Retailers Association of Bulawayo said retailers started recording a decline in sales following the sprouting of wholesale outlets in the city.

The association said most of the wholesalers were also operating as retailers.

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