Abstract
Independent retailers face many challenges that influence their growth and development. Independent retailers are small businesses facing competition from major retailers in South Africa (SA) that have penetrated the townships and rural areas. The purpose of the study was to investigate the challenges that influence the development of independent retailers in SA. A survey was conducted among small independent retailers in SA. The convenience sampling method was adopted for the study due to the inaccessibility of a database on independent retailers in SA. Existing literature was used to design a questionnaire, targeted at small independent retailers, to investigate the challenges that influence their business performance. The findings of the study revealed that finance and marketing are the major challenges influencing the operations of small, independent retailers. Business-related challenges are the least challenging aspects for small independent retailers in SA. Independent retailers need to manage their businesses appropriately in order to survive and sustain their businesses. Independent retailers buy products from wholesalers while a few of them buy directly from manufacturers.
Highlights
Independent retailers in South Africa (SA) face many challenges
The penetration of large retailers into the townships and rural areas has led to a decrease in the number of small independent retailers and, at the same time, some of these small retailers have experienced a decline in profitability (Department of Economic Development, 2015)
The results indicated that educational level has a significant impact on independent retailers, which could mean that the challenges that influence independent retailers could differ across levels of education
Summary
Independent retailers in South Africa (SA) face many challenges. These challenges have influenced their survival and growth. A small number of major retailers that create an environment of severe competitive pressure for small independent retailers dominates the retail market in SA. These major retailers have increased their market penetration in SA by extending their services to the townships and rural areas and they have increased their marketing efforts through brand promotions and advertising (Durham, 2011). The penetration of large retailers into the townships and rural areas has led to a decrease in the number of small independent retailers and, at the same time, some of these small retailers have experienced a decline in profitability (Department of Economic Development, 2015). Independent retailers are losing customers to major retailers in SA, since customers are spending less at independent stores compared to large retailers (Durham, 2011)
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