adminZIMBABWE consumers are now resorting to cheap goods as a way of countering the effects of depreciation of incomes that have been worsened by poor performance by industry, analysts have observed.
The trend by consumers, noted the analysts, is now manifesting in formal companies that have seen volumes and profits shrinking over the years.
Zimbabwe’s largest listed company, Delta Corporation, for the first quarter that ended in June, said volumes declined on weak consumer spending, recording a decline across all its categories that include an eight percent drop in lager volume, 15 percent decrease in soft drinks and 12 percent drop in sorghum beer.
This situation is not unique to Delta only but other companies are facing similar challenges of declining volumes and sales as consumers opt for cheaper options.
Buy Zimbabwe economist Mr Kipson Gundani said with depreciating income levels, consumers were going for low end value products like opaque beer as compared to lagers.
“Consumption patterns have changed with people moving to less expensive products that still serve the same purpose. Depreciating income can be seen through the number of retrenchments and the high unemployment levels while the greater part of the population is in the informal sector. Those who are in the informal sector largely rely on buying and selling goods but need to sell to someone and it is mostly those in the productive sectors that generate value,” said Mr Gundani.
He said declining volumes in industry painted a picture where economic fundamentals are deteriorating and people continue losing incomes hence the shift from buying expensive to cheaper things.
“Vendors are a direct result of lack of formal employment as options are eroded. The economy is ill and people are becoming poorer,” he said.
Consumer Council of Zimbabwe Matabeleland regional manager Mr Comfort Muchekeza said it was true that there was a change in the consumption patterns of consumers.
He said there was a time when it was a general belief that drinking clear beer (lagers) was some status symbol while opaque beer was considered to be for low class individuals.
“The shift indicates that levels of income that consumers are getting are no longer as appealing as they used to be. People would rather buy spirits (hot stuff) as it is cheaper and get them drunk quickly.
This also applies to clothing as second hand clothes have become more popular in all urban centres and consumers are shopping from bales as compared to formal retail shops as income determines lifestyle,” said Mr Muchekeza.
He said for non-alcoholic beverages, people were opting for traditional drink (mahewu) instead of soft drinks because the benefits derived from mahewu were better.
Bongani Ndlovu