Night grocers overrun the capital

Livingstone Marufu
WHENEVER night falls in Harare, both laws and by-laws go to sleep.

And almost always where the law takes a nap, sanity gives way to insanity: commuter omnibuses drive against the flow of traffic; pushcarts and touts scrum with motorists for the right to use the road; and the ever-growing army of vendors overruns the city.

It all begins to make sense.

Most of the cars and trucks that are innocently parked during the day become convenient warehouses from which all manner of wares, particularly basic commodities, are retrieved.

Small-time grocers — mainly selling day-to-day items such as cooking oil, flour, soap, and body cream, among other items — have literally taken over the city.

Not that the conventional supermarkets are empty; they are actually full to the bream.

In fact, OK Zimbabwe, which has a huge footprint on the local retail market, with 63 stores, reported that revenues climbed 2,3 percent to US$219 million in the six months ended September 30, 2016.

Profit after tax (PAT) also rose 87 percent to US$2,3 million.

Its competitors Pick N’Pay, Choppies, the new corporate SPAR chain and wholesalers-cum-retailers such as Metro Peech, N Richards are presently expanding.

Price

But almost all the brick-and-mortar supermarkets are encumbered by huge costs of maintaining their businesses.

There are rentals, wages, licence fees, water and electricity tariffs, and statutory obligations such as pensions that they have to contend with.

This is all factored into the price that consumers have to carry.

However, night merchants do not have any such burdens.

“We sell most of these goods at a take-away price as we don’t have some rentals, rates, Zimra (VAT) and all other unnecessary expenses.

“I don’t see the need to open a shop in town when I can have a mobile shop here (parked truck) that helps me make US$1890 weekly,” said Mr Nevermore Chirezva who operates along Fourth Street.

“I start my business at 6pm. The police and city council will have finished their duties. On a good day, I usually get around US$270 for the few hours I operate.”

And indeed their prices are jaw-droppingly low relative to conventional supermarkets.

A survey conducted by The Sunday Mail Business last week indicated that while 2kg washing powder is being sold for US$6 in supermarkets, the same product is going for about half the price (US$3,50) on the streets.

Those who have developed a liking for Nivea body cream would now rather buy it from street merchants where a 400ml bottle costs US$3,50, which is markedly lower than US$6,20 in formal shops.

Similarly a 1 kg pack of cremora, which ordinarily sells for US$4,50 in supermarkets, can be purchased for a bargain price of US$3,40 from night grocers.

The same goes for creamer coffees, baked beans, cooking oil, canned fruits, salad creams, soap, tooth paste and flavoured milks.

The bane of SI 64

While Government crafted Statutory Instrument (SI) 64 of 2016 to try and channel consumer taste and spending to local commodities, uncompetitive prices and sometimes poor quality products continue to feed demand for foreign goods.

Such a bureaucratic bottleneck inherent in import restrictions has also created a phenomena where the “middleman with the permit” is unnecessarily burdening supermarkets, while at the same time promoting cross-border mules that are smuggling wares for fly-by-night merchants.

Most of the merchants who spoke to The Sunday Mail Business last week did confirm that most of their goods are indeed smuggled into the country, especially from South Africa.

But it is not only imported wares that are selling on the streets, local commodities are also fighting for space on street pavements.

It is not uncommon to see goods such as Jade soap, Gloria self-raising flour, cooking oil and Pro brands rice among other products.

Again, most, if not all, of these products are relatively cheaper than in retail shops.

Apart from the hefty cost structures that make goods from established stores expensive, it is generally claimed that some of merchants are making a living out of hoarding local goods, repackaging them at a less weight and stamping fake expiry dates on them.

Norest Chibikwu (mukoma Nodza) who sells his products along Mbuya Nehanda Street, admitted as much.

“We go to factories to buy our goods in bulk and then repackage them for the reselling. . .

“We have many suppliers of containers and stickers exactly the same as those of companies and we have the expiry date printers which can easily change or shift the date to suit us,” he said.

Strictly cash

The language that is understood by night grocers and their customers is cash.

Every transaction is strictly in cash, and plastic money does not cut it.

Mukoma Nodza added: “Plastic money would kill our businesses as our suppliers are totally rejecting it given the amount of time taken to do a transaction. With cash, you are given some big discounts prompting us to get extra goods than we bought.

“Yes, we get bond notes time and again and we want it but we have seen some US$20, US$50 and US$100 notes here and we are using them.”

But the more such informal businesses grow, the more the taxman’s job becomes difficult.

In a way, the success of informal traders represents their success rate in avoiding tax obligations that naturally sustain the national purse.

The Zimbabwe Revenue Authority (Zimra) is still struggling to bring informal businesses under their influence, with the result that tax avoidance and tax evasion is rampant.

Faced with a shrinking tax base, Zimra has unfortunately had to react in the worst way possible – wringing out more taxes from already compliant businesses.

It is conundrum. One that is proving difficult to solve.

It seems for as long as there is night and day, vendors will continue to rule the night.

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