Consumers grapple with soaring cost of living

CLOUDINE MATOLA

 

A family of six now spends roughly ZW$2,725,165.02  a month in Zimbabwe, up from ZW$2,697,548.86 reported in September 2023 due to the country’s severe cost of living crisis, according to Consumer Council of Zimbabwe  (CCZ).

Many families are living below the poverty line as a result of the ailing economy and high cost of living. Some households are finding it difficult to purchase necessities because of the declining value of the Zimbabwean dollar.

In an interview with the CCZ spokesperson Phillimon Chereni said in an effort to preserve value,consumers have since altered their purchasing habits.They now quickly purchase US dollars that they can save for later use whenever they receive income in Zimbabwean dollars.

“Move just confirmed changing shopping trends by consumers, as they seek to store value in the United States dollars especially in hyper inflationary environment.Whenever they earn Zimbabwe dollars income they quickly dispose it off by buying stable currencies which they keep for future use,” said Chereni.

According to Chereni, the majority of customers now favor making purchases from  tuck shops or other informal traders who trades exclusively in foreign currency. Major retailers who use multiple currencies as defined by the government have been impacted by this.

“Consumers’ shopping patterns have since changed, even though they earn salaries in Zimbabwe dollars currency, save for allowances that are paid in  United States dollars. The trend has seen consumers preferring to shop in tuck-shops, car boot sales, vendors in the streets who are predominantly selling in foreign currency whereas, major retail shops use a basket of currencies as spelt out by monetary authorities, in that regard they have been on the losing trend by using fixed rates prescribed through the auction system,” he said.

Major retailers are now pricing their goods in US dollars after President Emmerson Mnangagwa extended the use of the multi-currency regime until 2030, but their costs remain higher than those of informal traders.

Chereni claims that prices in Zimbabwean dollars are inflated to reflect the parallel market rate, which is one of the reasons why buyers prefer to pay with United States  dollars when making purchases.

“Prices indexed in Zimbabwe dollars in most cases are inflated to match black market rates, so consumers might end up preferring to use United States dollars instead,” he said.

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