Zimbabwe: Retailers hit hard by tough cash terms

The situation has further crippled retail operations across the country, particularly those belonging to big operators like listed concerns, OK Zimbabwe and Kingdom Meikles Africa.

“We are under scrutiny from regulatory authorities because they are monitoring all our transactions. They want us to bank all the money we collect,” a manager with a retail outlet in Harare's Central Business District (CBD) said.

As a result, he said, they were unable to restock because most suppliers were demanding cash, and most of their customers paid using debit and credit cards because of difficulties accessing cash from banks. The central bank has put daily cash withdrawal limits at Z$500 per day, just enough for bus fare into town and back home for most urbanites.

Most OK and TM supermarkets around the capital were empty, unable to stock even basics like milk, carbonated soft drinks and meat.

TM Supermarket are jointly owned by Kingdom Meikles Africa and South Africa's Pick n' Pay.

John Moxon, the Kingdom Meikles board chairman, said in his half-year statement issued this week: “Suppliers are driving harder for cash terms.”

He reported, however, that the group's retail operations had reduced their operating losses to Z$59 quadrillion (Z$59 000 under the currency's new value) during the six months to June 30, 2008, from Z$79 quadrillion (Z$79 000) during the comparative period the previous year.

He said margins had been under pressure due to the high cost of supplies.

“Zimbabwe industry capacity utilisation continues to fall and business closures continue to be a reality, reducing supplies to our retail units,” said Moxon.

He said the group was focusing on “optimising retail space with available stock,” even as product availability remained constrained by low manufacturing output and available cash flows for local and imported goods.

One retail shop owner said they were “putting down” point of sale machines in order to force their customers to buy with cash rather than cards.

“You get a supplier for vegetables who wants cash and you can't raise it if you open the card machines. Few suppliers want payment by cheque of RTGS (real time gross settlement system),” the shop owner said, adding that his operations were not closely monitored by regulatory authorities.

It is now common to find “Not Working” notices on most point of sale terminals in retail outlets battling to raise cash during the day.

The notices are usually replaced by “Working” notices in the evening.