Abstract
The retail sector forms a critical element of a community’s economic and social welfare. It provides people with choices and services. These choices were until recently very limited in township areas. The pre-1994 retail landscape was dominated by small, often informal businesses offering basic household necessities to relatively low income earners. This has resulted in township residents’ preference to shop outside townships, known as ‘outshopping’. Rapid income growth of township residents since 1994 resulted in a substantial increase in consumer expenditure in these areas, known as ‘in-bound shopping’. This lucrative emerging market forms the last retail frontier in South Africa and is being explored by national retailers, especially supermarket chains. This article is aimed at establishing the impact of shopping mall development in townships on the traditional small township retailers including spaza/tuck shops. The net balance sheet on the impact of shopping mall development on small township retailers clearly suggests a decline in the township retailers’ market share. A change in small business model towards, inter alia, effective customer service with a small dedicated assortment of merchandise, satisfaction of emergency needs, selling in small units and extension of credit facilities may result in the survival of some small township retailers (albeit often at a smaller turnover).
Highlights
The past thirty years have seen widespread decentralisation of retail space throughout the large metropolitan areas to suburban areas
The majority of township workers engaged in economic activities outside the townships with most of their shopping being in the main city centres or at shopping malls at the fringes of township areas
The article is aimed at analysing the impact of shopping mall development on the survival of small informal and formal retailers located in township areas
Summary
The past thirty years have seen widespread decentralisation of retail space throughout the large metropolitan areas to suburban areas. This trend resulted in a decline of the central city areas. Until recently, this new structuring of retail space largely excluded the development of township areas. The pre-1994 retail landscape in the township areas was dominated by small, mainly informal retail businesses offering basic products and services to a relatively low income consumer market. These businesses served as convenience shops to primarily lower income groups and attracted only a small portion of the consumer spending in township areas. The majority of township workers engaged in economic activities outside the townships with most of their shopping being in the main city centres or at shopping malls at the fringes of township areas
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