Competitive factors between local and foreign national small business retailers in South Africa: The case of Cape Town’s Townships

Abstract

This paper is based on the study that sought to identify the core competitive factors that differentiate foreign national small business retailers from local South African small business retailers in the way they operate their small retailing businesses. Primary research was conducted in two of Cape Town’s (South Africa) townships, Delft and Eindhoven. 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. 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. Furthermore, the study revealed that most of local small business retailers have never had a business finance mentor in their entire trading life. The study revealed that there is a need for a targeted funding model for potential and current local small business retailers. The study proposes a three-stage business intervention model to assist South African small business retailers to become more competitive in township retailing environments.