The Sunday News
ONE of the earliest beneficiaries of Zimbabwe’s dollarisation in 2009 was the retail sector. In fact at that time the most sort after business in town was a retail shop as the business community wanted to take the opportunity of the dollar and sudden availability of goods to bring life to their purses that had dried up during the hyperinflation era.
The population too, was still smarting from the goods shortage hangover and people were just happy to see goods back on the shelves.
Buying in most cases was out of impulse and excitement. People just wanted to lay their hands on goods some they had last seen in shop shelves years back.
Taking advantage of the confusion and excitement on the market, most retail shops pegged their prices very high compared to those in other countries in the region.
The greediness among the business community was unbelievable. Government as a way of boosting availability of most basic goods had removed duty allowing the business community to import as much as they could.
The only expense that these business people were incurring then was probably transport costs.
However, in spite of such a generous environment the pricing was out of this world.
A two-litre bottle of cooking oil was selling for as much as $5 almost double the price of the same commodity in countries such as South Africa.
Most of the profit margins where around 100 percent.
Like what I said, most people were just like hungry lions, being happy to grab something because it was now available.
Looking back now, this was daylight robbery. The retail sector was just mopping our foreign currency and then take it out to buy more goods to sell at very astronomical prices.
The situation was also being made worse by rounded up prices since change was a nightmare for most shops.
Worse, the business community came up with a pricing system which smelt of hypocrisy pegging prices which they knew needed change when it was clear there were no coins.
Business people started forcing customers to accept change in the form of small goods or vouchers.
Suddenly sweets and biscuits and other small grocery items became a symbol of change.
While this sounded like an innovation, it was in fact another way the business community was exploiting customers as it meant more sales and increased profits.
For customers it was meaningless as they were forced to buy goods not out of need but being forced by circumstances.
Even as some of the businesses started using rand coins as change it was always to the disadvantage of the customer as the rates were estimated and often favoured the retailer.
As members of the public started recognising how they were being fleeced by the retailers they also came up with counter measures.
Most people especially those living in towns near borders started crossing into neighbouring countries to buy the groceries at cheap prices.
Even those staying in inland cities also joined, often pooling resources to travel to these countries and buy some of the basic commodities.
The business community somehow tried to adjust their prices but still the margins were high and unreasonable.
As years flew by, local manufacturers were also gaining ground and putting pressure on Government to either ban or at least put duty on some of the products as a way of protecting industry.
Poultry products became the first victims, when Government banned the importation of these products to boost local production.
Over the years Government also gradually introduced duty on most of the imported goods as local production was also peaking.
Local production has not reached the intended levels but last year Government finally re-introduced duty on almost all basic commodities.
Importers now pay duty on most of groceries coming into Zimbabwe.
What, however, is surprising is that in spite of all the pointers which support that it is now expensive to import goods into the country, the retail sector has reduced their prices to reasonable prices and in some cases to at par to those in the region.
On the surface it might look like it is because of the firming of the dollar against regional currencies but even after applying the existing exchange rates some of the products are still cheaper compared to when we started using the dollar.
Some imported beer cost less than a dollar and consider that this is a product which is manufactured in another country, transported, probably pays duty but still remain cheaper than our local beer manufactured a stone throw away.
On top of that, retail shops are competing for customers through endless promotions to ensure that they push volumes.
Almost every day, major retail shops are running promotions showing price knocks on many products.
Why then was the retail sector pricing their goods so much when the country started using foreign currency and when the goods were imported at almost zero duty and now reducing their prices when duty is now into effect.
While what they did then was almost criminal, it is heartening to note that they have finally seen the light and adjusted their pricing structure.
The move by the retail sector must serve as a warning to the local business people that globally profiteering is not always about pricing out customers.
It is about providing a good service at a reasonable price. More people will buy the goods and this translates to huge profits.
It is unfortunate that Zimbabwe still has a lot of goods and services which are priced above average.
The good thing about Zimbabweans is that they will simply resist the services or find an alternative.
Right now mobile telephone operators are recording reduced revenue because of the emergence of alternative communication.
They are mourning today but these are the same companies which used to sell a sim card at $250 when its price internationally is around 10 cents.
Their charges for mobile calls are still considered costlier than their regional counterparts. They even charge for free services like WhatsApp.
In the past, many households never used to worry or budget for water and electricity bills, how come today these bills are now a headache for many. It could mean that the way these services are priced is wrong.
This shows there is still a gap in Zimbabwe, where business people are still exploiting customers. It is time to see the light and start applying the best business practices.
