The incorporation of small retailers by shopping mall owners: a comparison between a mature (Dutch) and an emerging (South African) market

Abstract

In both mature and emerging markets the share of retail chains in shopping malls is increasing, while the number of small independent retailers is decreasing. Nonetheless, there is general consensus that small retailers play an important role in making the shopping environment more attractive and stimulates local economic activity. In this study we examine the role of shopping mall owners in a mature market (The Netherlands) and an emerging market (South Africa). In the Netherlands, a small retailer is defined as a retailer with 10 or less employees. In contrast, although formal retailers exist in South African townships, most retail activities are often of an informal nature. These retailers are unregistered and, consequently, do not pay taxes. The similarity between small retailers in both markets is that they are focused on and operate within local communities, rather than operating at regional, national or global scales. Therefore, the decreasing share of small retailers could negatively affect the development of local economies and the welfare of these local communities. Hence, various studies have been or are being done from which initiatives and interventions are being developed in order to stimulate small businesses. These studies, and policy initiatives mainly focus on the business skills of small retailers on the one hand, or/and government policy on the other hand. However, little is known about the role that shopping mall owners play in this sphere of economic activity. Although the importance of incorporating small retailers in shopping malls is rarely disputed, significant impediments often exist which make it difficult to promote small retailers in shopping malls. But, according to a Dutch shopping mall owner, Dutch shopping mall owners are willing to encourage smaller retailers, but the institutional framework reduces such opportunities. The relationship between shopping mall owners and small retailers is affected by market as well as institutional conditions. This stands in the way of mall owners incorporate more small retailers in malls. By analyzing the relationship between shopping mall owners and small retailers/retail chains through a literature review, and the analysis of the impact of market and institutional framework conditions on this relationship, through interviewing three South African and three Dutch shopping mall owners, this research tries to identify the causes of the decreasing share of small retailers in Dutch and South African township shopping malls. Furthermore, by comparing the market and institutional frameworks conditions that affect the willingness and capability of South African township and Dutch shopping mall owners to incorporate more small retailers, the general determinants of small retailersi accessibility to shopping malls is determined .