Retailers jostle for bonus money
You'd think all is well if you walked into one of those departmental stores today and were welcomed by the glitter of decorated Christmas trees with flashing lights, with all the hues celebrating a cherished festive season.
Indeed, it is occasion to be merry, and spending shouldn't be just for those with deep pockets.
The Minister of Finance, Samuel Mumbengegwi, has just ordered the treasury to up the threshold for the tax-free bonus, also known as the thirteenth cheque, to Z$75 million, and the tax-free income threshold has been raised from Z$4 million to Z$30 million per month.
Never mind that he will take away the bulk of that through Value Added Tax, and the controversial HIV/AIDS levy.
Just watch the country's retailers jostling to get that elusive dollar from their restive customers, but being dejected because there is very little stock to fill up shops and let the bonus dollar trickle into their coffers.
So, for the little available in the shops – most retailers are closing up sections and cramming goods into one area to look neat and well stocked – prices went up by at least 100% to capture more cash from stranded buyers.
A quiet Christmas
“(Christmas) is going to be much more subdued,” Dave Mills, the retail director for Meikles Africa Limited, told the media last month. Meikles runs Zimbabwe's biggest supermarket chain, TM Supermarkets, owned jointly with South Africa's Shoprite.
Furniture dealers, the biggest beneficiaries of the Christmas-spurred buying spree, are despondent. Listed furniture retailer, Pelhams Limited, indicated that factories were not producing enough stock for their shops because of an uncertain government pricing policy.
OK Zimbabwe, the second biggest supermarket chain after TM, has reported incurring huge loses due to the government policy, which triggered market-wide shortages and spawned empty supermarket shelves when retailers and manufacturers where forced to reduce prices by at least 50% in June.
OK Chairman, Eric Kahari, indicated to investors that there was a noticeable improvement in stock supplies, but most OK Supermarkets remain almost empty, with little or not basic food commodities.
Reserve Bank of Zimbabwe (RBZ) governor, Gideon Gono, had indicated that shops would be full again in October, but recently told the business community not to overstay on the Christmas holidays so they can produce more to enable retailers to restock.
Cheap Basic Commodities Supply Intervention Facility funds availed to the business community to increase production have been reportedly diverted to the stock market. Manufacturers say they would need foreign currency to import raw materials and start producing.
Zhing-zhongs attract the money
However, those shops selling cheap stock from China and Dubai are flooded, and there's little government monitoring of their largely informal business, now constituting the bulk of retail operations in the country.
However, one shopper indicated: “Their prices are reviewed daily but that's where we're taking our money”.
The daily price increases are result of the movement in the parallel market rate for the defenceless domestic currency and duty for the imported goods, mockingly referred to as Zhing-zhongs, is being charged in foreign currency.
Mills says Meikles' departmental stores and supermarkets are now finding it difficult to import because of the foreign currency duty payment system.
OK Zimbabwe has expressed the same concern, but without the imports, they are at the mercy of risk-averse domestic producers. So far, they are not producing, but retailers have placed their orders.
They are calling the bluff on the government, apparently.
