By Kundai Marunya

THE recent wave of big retail outlets closing or scaling down operations in Zimbabwe has sparked concern among consumers and economic analysts. 

However, a closer look at the situation reveals that these closures do not necessarily indicate a worsening economy but rather a shift in business models.

Large retail chains, once dominant in the sector, are struggling to adapt to an environment now dominated by small to medium enterprises (SMEs) and tuckshops, which are proving to be more elastic and responsive to consumer needs.

“The recent closure of several outlets under the N. Richards Group, coupled with Spar Zimbabwe’s painful decision to shut down Queensdale Spar, Choppies Zimbabwe’s exit from the market, and Mahommed Mussa’s significant reduction of shop space by 60 percent highlights the growing crisis,” said Confederation of Zimbabwe Retailers (CZR) president Denford Mutashu.

“…the growing levels of informalisation have led to a significant loss of market share for formal businesses.”

Over the past few years, the retail industry in Zimbabwe has seen a shift from large supermarket chains and hypermarkets towards smaller, independently owned businesses. 

This trend is evident in the closure of several big retailers, some of which had been household names for decades. 

However, instead of leaving behind vacant buildings and declining commerce, these closures have paved the way for a surge in new businesses.

A prime example is the transformation of the former Jaggers Msasa, a retail giant that eventually shut down. Its premises were left vacant for just a short time, as TM Pick n Pay swiftly moved in and successfully adapted to the changing market. 

Similarly, Choppies in Ruwa recently closed its doors, but the premises were quickly taken over by Gain Cash & Carry. 

This pattern demonstrates that the retail sector is not collapsing but rather evolving, with new players entering the market and succeeding where previous ones struggled.

One of the biggest challenges for traditional retail chains in Zimbabwe has been the rise of SMEs and tuckshops. 

These smaller businesses, often run by indigenous entrepreneurs, have become the preferred choice for thousands of consumers. 

Unlike large retailers that have high operating costs, strict corporate structures and rigid pricing models, SMEs are flexible, allowing them to quickly adjust prices, source products from diverse suppliers, and maintain lower overhead costs.

“It has always been the nature of business that those who are rigid will find themselves breaking,” said economist John Muleya. 

“Big retailers lack the flexibility that small businesses have to adapt to the ever changing playing field.” 

Even major wholesalers are adapting to this new reality. Mohammed Musa, one of Zimbabwe’s largest wholesalers, has significantly reduced the trading space at its flagship store in Harare to accommodate smaller businesses. 

Instead of relying solely on the wholesale trade, the company has shifted towards renting out sections of its premises to various SMEs. 

This move has proven to be highly profitable, as the company now generates more revenue from rental income than it would have from traditional wholesale operations.

This shift in strategy highlights how the retail sector in Zimbabwe is moving from the dominance of large corporations towards a more decentralised model, where smaller businesses play a more significant role.

Zimbabwe is not the only country experiencing this shift in retail trends. 

In South Africa, major retailers like Checkers have responded to the changing business environment by embracing smaller, community-focused stores. 

Instead of relying solely on large supermarkets, Checkers has introduced container stores in high-density areas, making essential goods more accessible to customers.

This strategy has allowed Checkers to compete with informal traders while maintaining a presence in areas that were previously underserved. 

The concept of container stores and smaller retail outlets could be an effective model for Zimbabwean retailers looking to remain competitive. 

Instead of investing in massive buildings with high operational costs, businesses can open strategically placed small shops that cater to specific community needs.

One of the most significant outcomes of the changing retail landscape in Zimbabwe is the increase in locally owned businesses. 

Historically, the country’s retail sector was dominated by corporations controlled by wealthy white investors and a handful of black elites. 

These companies had significant financial backing, access to foreign suppliers, and control over major retail spaces.

However, with the rise of SMEs, more indigenous entrepreneurs have entered the market, challenging the previous status quo. 

This shift is not only democratising the retail sector but also ensuring that more money circulates within the local economy rather than being repatriated by foreign-owned corporations.

The growing dominance of indigenous businesses also reflects the resilience and adaptability of Zimbabwean entrepreneurs. 

Many of these small-scale retailers started as informal traders before expanding into more structured businesses. 

Unlike large corporations that struggle to adjust to economic fluctuations, these businesses are highly flexible, allowing them to thrive even in a challenging economic environment.

Recognising the rise of SMEs and informal businesses, the Government has taken steps to integrate them into the formal economy. 

Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube recently announced new measures aimed at formalising the informal sector.

These measures include mandatory licensing for informal traders, ensuring that they operate within the confines of the law. 

The Government will enforce tax collection from informal businesses to ensure they contribute to the national fiscus. 

Additionally, informal traders will be encouraged to sell goods in specific zones rather than operating from unregulated street markets, and there will be a crackdown on smuggling, which has given an unfair advantage to informal traders over formal retailers.

These measures aim to level the playing field between formal and informal businesses while ensuring that the Government collects revenue from all commercial activities. 

However, some business owners fear that over-regulation could stifle the growth of small businesses, making it necessary for the Government to strike a balance between formalisation and supporting entrepreneurship.

While SMEs and tuckshops are flourishing, larger retailers still have an opportunity to remain competitive if they adapt to the changing market. 

Some of the challenges they need to address include high operational costs, as large stores require significant resources to maintain, making them less profitable in an economy where consumers prioritise affordability. 

Unlike SMEs, which can adjust their prices based on market conditions, large retailers often have fixed pricing models that make them less competitive. 

Consumer preferences are also shifting, with Zimbabwean shoppers increasingly opting for convenient shopping experiences,  while going for smaller stores closer to residential areas over large supermarkets.

To stay relevant, big retailers could adopt strategies similar to those seen in South Africa, such as opening smaller neighbourhood outlets, partnering with SMEs, or shifting towards online and mobile retailing.

The ongoing transformation of Zimbabwe’s retail sector is not a sign of economic failure but rather a reflection of a business environment that is evolving. 

The closure of big retailers should not be viewed in isolation but rather as part of a broader shift towards a more diverse and inclusive economy.

With SMEs and tuckshops playing an increasingly significant role, the retail sector is becoming more competitive and dynamic. 

This change is also creating opportunities for indigenous entrepreneurs, ensuring that economic benefits are distributed more evenly across society.

As the Government continues to implement policies to formalise the informal sector, it will be crucial to ensure that these measures do not stifle the growth of small businesses. 

Instead, policies should focus on supporting entrepreneurship, fostering innovation and creating an environment where both small and large retailers coexist.

Ultimately, Zimbabwe’s retail sector is not in decline but rather in transition. Businesses that can adapt to the new landscape — whether through innovation, flexibility or strategic partnerships — will thrive in the years to come.