Economic Dynamics of Fake Goods in Zimbabwe’s Tuck Shops vs Formal Retailers.
Introduction.
Zimbabwe’s retail sector is becoming increasingly divided between formal supermarkets and informal “tuck shops,” some government officials and researchers estimate that as much as 50% of the stock sold by tuck shops could be counterfeit or substandard (ZimLive, 2025). The informal sector’s hallmark which is reduced overheads, limited regulatory oversight, and tax avoidance enables these micro-retailers to undercut formal supermarkets on price. However, this minimal regulatory environment also encourages the proliferation of fake merchandise. Broader research findings show that the informal economy generally emerges out of necessity in contexts of weak governance (Freathy et al., 2024; Salvi et al., 2025). The Covid-19 pandemic, moreover, exacerbated vulnerabilities in Zimbabwe’s urban informal sector, reflecting patterns of “urban marginality” in Bulawayo (Ngwenya and Moyo, 2024) and demonstrating how significant shocks can reshape or intensify informality (Salvi et al., 2025). Additionally, counterfeit goods such as mislabeled groceries illustrate a classic “credence good” challenge (Lei et al., 2025), where consumers struggle to verify authenticity on their own.
Divergent Cost Structures, Formal Retailers vs. Tuck Shops.
Formal supermarkets in Zimbabwe bear a variety of costs that tuck shops can often avoid, which translates into higher shelf prices. Goods entering the country can incur duties of 15–40% plus 15% VAT (Trade.gov, 2023), and supermarkets also shoulder documented transport, insurance, and safety checks, along with city-centre rents and electricity bills, including the use of generators during frequent power outages (ZimPriceCheck, 2024a). They also abide by labour regulations that require paying mandated wages and withholding PAYE taxes (The Zimbabwe Mail, 2024a), and they must comply with a 25% corporate income tax (KPMG, 2023), licensing fees, and product standards. These expenses add up to 10–30% higher prices compared to those found in the informal sector (ZimPriceCheck, 2024a).
By contrast, tuck shops minimize costs through underreporting at borders or outright smuggling, often meeting expenses via smaller bribes instead of official tariffs (ZimLive, 2025). They skip VAT and corporate taxes (The Zimbabwe Mail, 2024a), operate out-of-home garages or roadside spaces with minimal rent and utility payments, and typically employ family or off-the-books workers with no formal oversight of labour or product standards. As a result, they gain a steep price advantage and attract cost-conscious customers, echoing studies of rural Scotland’s informal food trade and its low operating expenses (Freathy et al., 2024). This pattern parallels precarious economies or conflict-affected zones, where informality becomes a survival mechanism (Salvi et al., 2025) and disruptions like COVID-19 highlight the agility of small-scale operations (Ngwenya and Moyo, 2024).
Smuggling, Corruption, and Counterfeit Supply Chains.
Smuggling and corruption lie at the core of this cost differential. Porous borders with South Africa or Botswana allow “runners” to bring in goods cheaply, avoiding official duties and paying only a small bribe (ZimLive, 2025). Local or regional informal producers add to the problem by making subpar versions of well-known brands, which flow easily into informal markets when brand protection enforcement is weak (ZimLive, 2025). In academic terms, these fake products mimic the “fake reviews” phenomenon seen in credence goods (Lei et al., 2025), both relying on consumers’ limited ability to assess authenticity.
Price Differentials and the Credence Goods Problem
Price differences reveal how this process unfolds in consumers’ daily lives. In a formal supermarket, a can of baked beans might cost US$1.50–1.80 after duty, VAT, and overhead, leaving a net margin of about 5–7%. The same can in a tuck shop may be obtained at less than US$1.00 plus a small bribe, ignoring official tariffs, and resold at US$1.10–1.30, thus undercutting the formal store while potentially enjoying a higher percentage profit. Over multiple items, the difference of US$0.30–0.60 adds up quickly in Zimbabwe’s inflationary climate, steering low-income consumers toward cheaper goods. Yet there is a darker side to these savings. Consumers often face uncertain product quality, risking counterfeit or adulterated goods that fall into the credence category, where even after purchase it is difficult to ascertain authenticity or safety (Lei et al., 2025).
Macroeconomic and Socioeconomic Consequences
The ramifications of this arrangement stretch beyond simple price comparisons. Supermarkets lose sales volume and might close branches[1], reducing formal jobs, tax revenue, and consumer choice (The Anchor, 2024). The government experiences significant fiscal shortfalls because informal traders bypass import duties, VAT, and corporate taxes; estimates suggest Zimbabwe loses about 25% of its potential revenue to informality (The Zimbabwe Mail, 2024a). Counterfeit goods like soaps, toothpaste, or processed foods flood local markets and become normalized (ZimLive, 2025), while consumers face health hazards from improperly stored items or counterfeit cosmetics.
Like experiences during COVID-19 in Bulawayo, marginalization propels individuals toward any means of survival, including selling fake or smuggled goods. The pandemic “reconfigured how cities manage urban marginality” (Ngwenya and Moyo, 2024: 3), simultaneously pushing informal traders deeper into unregulated activities and making them a crucial source of affordable goods for impoverished communities.
Potential Policy Responses
Several solutions might help address these interlinked challenges. Strengthening border control through scanners, spot checks, and staff rotations could reduce smuggling, provided corruption is tackled through zero-tolerance enforcement that boosts the real costs of illicit entry. Rationalizing duties by lowering them on staple goods and implementing a presumptive tax for micro-retailers could encourage registration and at least partial contribution to government coffers (iHarare, 2024). Supporting the transition from informal to formal markets by providing micro-financing[2], favourable supply-chain arrangements and basic training in bookkeeping or product sourcing can also improve compliance and ensure safer goods.
Consumer awareness campaigns, potentially mirroring efforts to combat fake online reviews (Lei et al., 2025), could use authenticity labels or scannable codes to help individuals discern authentic brand goods from poor imitations. Random inspections in high-density marketplaces, along with the destruction of confiscated fakes, would send a message of deterrence. As Salvi et al., 2025 notes, however, informality can be a lifeline under conditions of conflict or crisis, and overzealous crackdowns could deprive many families of survival mechanisms, especially after the economic turbulence caused by Covid-19 (Ngwenya and Moyo, 2024).
Conclusion
Ultimately, Zimbabwe’s informal sector relies on circumventing formal processes and regulations to keep goods affordable in a highly inflationary environment, but this convenience comes at the cost of flooding the market with counterfeits and undermining the stability of formal retail. The same patterns appear in global contexts ranging from hidden rural food economies (Freathy et al., 2024) to unregulated e-commerce that sells deceptive products (Lei et al., 2025). In essence, informality tends to emerge where regulation is weak and where many consumers lack purchasing power.
Policy interventions should thus combine enhanced border security, moderate tariff reductions on essential items, equitable taxation for micro-entrepreneurs, and public education about the dangers of fakes. Only by addressing root causes like poverty, corruption, and policy gaps can Zimbabwe strive for a regulated, inclusive retail ecosystem that provides affordable goods without jeopardizing consumer safety or crippling the formal market.
Reference List
Freathy, P., Marshall, D., Davies, K. & Calderwood, E. (2024) ‘The importance of the informal food economy to food access and security: An examination of the Western Isles of Scotland’, Journal of Rural Studies, 111, 103392.
iHarare (2024) ‘Zimbabwe Introduces New 5% Tax for “Tuckshops” & Informal Traders – Here Is What You Need To Know’. Available at: https://iharare.com/zimbabwe-introduces-new-5-tax-for-tuckshops-informal-traders-here-is-what-you-need-to-know/ [Accessed 15 January 2025].
KPMG (2023) ‘Zimbabwe: Tax Measures in 2024 Budget’. KPMG. Available at: https://kpmg.com/us/en/home/insights/2023/11/tnf-zimbabwe-tax-measures-2024-budget.html [Accessed 10 January 2025].
Lei, Y., Ødegaard, F. & Pun, H. (2025) ‘Effect of counterfeits and fake reviews in markets for credence goods’, Omega, 131, 103218.
Ngwenya, P. & Moyo, T. (2024) ‘Covid-19 and managing urban marginality in Bulawayo, Zimbabwe’, Cities, 150, 105029.
Salvi, E., Hechavarria, D. & Gimenez-Jimenez, D. ‘Opportunity amidst explosions: How armed conflicts spark informal entrepreneurship in emerging economies’, Journal of Business Venturing Insights, 23, e00514.
The Anchor (2024) ‘Battle for the Streets: Tuck Shops Edge Out Zimbabwe’s Supermarkets as Economic Strains Deepen’. Available at: https://www.theanchor.co.zw/battle-for-the-streets-tuck-shops-edge-out-zimbabwes-supermarkets-as-economic-strains-deepen/ [Accessed 12 January 2025].
The Zimbabwe Mail (2024a) ‘Guvamatanga Backtracks on Praising Tuckshops’. Available at: https://www.thezimbabwemail.com/economic-analysis/guvamatanga-backtracks-on-praising-tuckshops/ [Accessed 12 January 2025].
Trade.gov (2023) ‘Zimbabwe – Import Tariffs’. Available at: https://www.trade.gov/country-commercial-guides/zimbabwe-import-tariffs [Accessed 10 January 2025].
ZimLive (2025) ‘Half of Stock Sold in Zimbabwean Tuck Shops Are Fake Goods – Ministry Official’. Available at: https://www.zimlive.com/half-of-stock-sold-in-zimbabwean-tuck-shops-are-fake-goods-ministry-official/ [Accessed 15 January 2025].
ZimPriceCheck (2024a) ‘Zimbabwe’s August 2024 Grocery Basket: Supermarket Prices Go Up Again’. Available at: https://zimpricecheck.com/market-intelligence/zimbabwes-august-2024-grocery-basket-supermarket-prices-go-up-again/ [Accessed 12 January 2025].
ZimPriceCheck (2024b) ‘Inside Zim Pricing Jungle’. Available at: https://zimpricecheck.com/market-intelligence/ [Accessed 12 January 2025].
Disclaimer: This essay is intended for academic and illustrative purposes, drawing on multiple sources to contextualize Zimbabwe’s informal retail environment and the broader issue of counterfeit goods.
[1] As seen with OK Zimbabwe see https://www.zimeye.net/2025/02/01/ok-zimbabwe-closes-five-branches/
[2] The question of currency needs to be addressed as well.