The Confederation of Zimbabwe Retailers (CZR) has raised alarm about the growing financial distress in Zimbabwe’s formal retail sector, warning that some of the country’s top brands, including major retail chains, are on the verge of bankruptcy due to fierce competition from the informal market.
In a submission to the government ahead of the 2025 National Budget, CZR highlighted the severe challenges faced by retailers and wholesalers. The paper, which included input from industry players, warned that many businesses in the formal retail sector are struggling to survive and may soon close down.
CZR pointed to the recent exit of Unilever from Zimbabwe and the difficulties faced by clothing retailer Truworths Limited as signs of the mounting pressure on the formal retail industry. The organization stated:
“Well-established companies like Truworths and Unilever have shut down operations, and many more businesses are facing the same fate.”
The retail body attributed the crisis to the rapid growth of the informal economy, which is undermining formal businesses. The informal sector, often driven by small-scale operators, benefits from a lack of regulation and avoids taxes, labor laws, and other statutory requirements, giving it an unfair advantage.
CZR also noted that informal traders, particularly cross-border operators bringing goods from Musina in South Africa, dominate the market. These traders avoid taxes and other legal obligations, making it difficult for formal retailers to compete.
In response, the retail sector has called on Finance Minister Mthuli Ncube to take urgent action to address the crisis. Proposed measures include exempting basic goods from VAT, reducing import duties on high-tax products, and eliminating import permits for most goods.
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