Abstract
Background: South African townships have a vibrant small retailing business which at some point was dominated by local traders. However, in recent times, the country has attracted migrants who are very competitive in the township retailing space. Aim: This study seeks to identify the challenges facing local small business retailers in the township retailing environments and then develop a business intervention model for traders to improve. Setting: Primary research was conducted in two townships of Cape Town – Delft and Eindhoven. Methods: The population of the study comprised two groups, namely, South African and foreign national small business retailers operating grocery retailer stores. The first group consisted of 55 South African small business retailers while the second group consisted of 75 migrant small business retailers. A random sample was targeted from each group and the quantitative research methodology was used in this study using a structured questionnaire with close-ended questions as a research instrument. Results: The results showed growth of foreign national retailers and decline in the number of the local retailers in the two townships. The study showed that migrant retailers have a competitive edge over local retailers. The study also revealed that most local traders have a lower level of education compared to their migrant trader counterparts. Conclusion: The local small business retailer requires targeted support from the government as suggested in the business intervention model proposed in this study.
Highlights
The South African economy has a very large micro-enterprise sector, comprising both formal and informal businesses, and it provides a good environment for entrepreneurial development and advancement
As the South African formal economy is unable to absorb the rising number of new entrants into the labour market every year, it often leads to economically active citizens pursuing micro-enterprises in the informal sector of the economy (Rolfe et al 2010)
While this is true for foreign national traders (61.8%), South African traders have some tertiary qualification as well, including bachelor’s degrees (5.3%) and diplomas (8%)
Summary
The South African economy has a very large micro-enterprise sector, comprising both formal and informal businesses, and it provides a good environment for entrepreneurial development and advancement. Since the post-democratic dispensation of 1994 in South Africa, the government has encouraged small business development through various legislation. According to Herrington, Kew and Mwanga (2017) in the Global Entrepreneurship Monitor (GEM) report, South Africa has low levels of entrepreneurial activity relative to other countries participating in the GEM survey. As the South African formal economy is unable to absorb the rising number of new entrants into the labour market every year, it often leads to economically active citizens pursuing micro-enterprises in the informal sector of the economy (Rolfe et al 2010). South African townships have a vibrant small retailing business which at some point was dominated by local traders. In recent times, the country has attracted migrants who are very competitive in the township retailing space
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