Businesses warned against hiking prices
BUSINESSES operating in Zimbabwe have been ordered to stick to fair pricing models and desist from profiteering and creating artificial shortages to avoid spoiling festivities for shoppers during the Christmas and New Year holidays.
It is common practice among local enterprises to profiteer and fleece consumers, taking advantage of frenzied shopping and strong demand for various goods during the festive season. Traditionally, businesses and dealers the world over stock up on various goods in anticipation of increased spending by consumers at such times.
However, this surge in demand for products and services leads to price increases, manipulations and profiteering as businesses capitalise on the excessive spending.
Basic commodities and other holiday-specific products may be on high demand, but are available in limited quantities, prompting retailers to increase prices to maximise their profit margins.
Although unfair hiking of prices leads to adverse customer experiences, loss of trust and possible lower long-term profitability, businesses and traders never stop their greedy practices this time of the year.
Sources said the Government had deployed trade officers in the market to keep an eye on traders, especially of basic products, to identify and bring to book those caught flouting the law during the festive season
Speaking after meeting with business member organisations (BMOs) last week to discuss prices of basic commodities and the market supply situation during the festive holidays, Industry and Commerce Minister Dr Sithembiso Nyoni said the ministry had observed an emerging trend of increases in the prices of basic goods such as laundry soap, cooking oil and mealie meal.
Sugar prices, however, remained constant. “We observed an emerging trend of increases in the prices of basic commodities during this week . . . As the ministry responsible for Commerce and Industry, we have the onus to get to the bottom of this and nip any negative developments in the bud.
“With BMOs, we agreed that the business community should trade fairly and stop profiteering and from creating artificial shortages.
“Let me assure the nation that industry has enough stocks of basic commodities and that business will immediately work on modalities to ensure that there will not be any sharp price increases,” said Minister Nyoni.
She said the country had enjoyed price stability for a while since the Treasury and the Reserve Bank of Zimbabwe rolled out tight monetary control measures earlier this year, adding that the environment must be maintained to promote consumer welfare.
The BMOs that interacted with the minister included the Grain Millers Association of Zimbabwe, the National Bakers Association of Zimbabwe, the Oil Expressers Association of Zimbabwe, the Zimbabwe Retailers Association, the Confederation of Zimbabwe Retailers, the Zimbabwe Sugar Sales and the Zimbabwe Sugar Association.
Economist Josephine Zikomo said consumers may be more willing to spend during this time, which can create an environment conducive to higher prices, but reproached retailers, saying they should not take advantage of the situation.
She, however, implored businesses to maintain the customer loyalty they have built over time. It is important for businesses to balance their profit goals with customer satisfaction and loyalty. Raising prices too steeply or in a way that appears exploitative can lead to negative customer experiences, loss of trust and potentially lower long-term profitability. Businesses must gauge customer reactions, monitor competition and carefully consider the potential consequences of price increases,” said Ms Zikomo.