Rethinking SA’s Spaza shop ecosystem: A comprehensive perspective

Kwalholhi Spaza Shop in Samora Machel township near Phillipi. Picture: Henk Kruger/Independent Newspapers

Kwalholhi Spaza Shop in Samora Machel township near Phillipi. Picture: Henk Kruger/Independent Newspapers

Published Oct 31, 2023


By Jacques Sibomana

Recent research conducted by Accenture has shed light on the evolving landscape of informal trading in South Africa, revealing both opportunities and challenges for Spaza shops, which are integral to our communities.

As a seasoned social entrepreneur with extensive experience in both informal and formal businesses across South African townships, I firmly believe that it's time to adopt a more nuanced approach to address the complex issues facing these cornerstones of our neighbourhoods.

The Accenture research underscores the pivotal role played by Spaza shops in the lives of South Africans. With more than 150000 Spaza shops nationwide, these establishments are not just local convenience stores, but also serve as essential sources of supplementary household income for many.

The informal sector, where Spaza shops thrive, accounts for a significant portion of the nation's annual food expenditure, estimated at 30%-40%. This sector represents a colossal potential market value of R178 billion, presenting substantial opportunities for businesses.

However, the research also uncovers the challenges faced by Spaza store owners and informal traders. These obstacles include inefficient supply chains, frequent product stockouts, substantial waste due to the limited shelf life of fresh produce, and an overreliance on overpriced branded products. In most cases, Spaza shops source their stock from wholesale retailers, leading to higher prices for consumers.

In light of these findings, it is clear that we must reconsider the role of Spaza shops in our communities. Rather than being the primary source of income for individuals, Spaza shops should function as supplementary income sources. This shift in focus can help mitigate market saturation and the associated problems, including shop owners resorting to selling expired products in a struggle to make ends meet.

To address this, I propose a strategic approach in which municipalities play a pivotal role in regulating Spaza shops. By implementing by-laws that restrict ownership to grant recipients, with a particular emphasis on the elderly and women, we can empower the most vulnerable members of our community while averting market saturation and its related issues.

In addition to regulation, transparency is vital for the sustainable growth of the Spaza shop sector. The Accenture Report estimated its market value at R178 bn, but more transparency is needed.

Therefore, I advocate for the provision of essential information, including detailed operating costs and profit margins for Spaza shops. Equipping aspiring entrepreneurs with this information is critical to enable them to make informed decisions and realistically assess the profitability of their ventures.

In conclusion, the time has come for South African society to come together and redefine the role of Spaza shops. Let's support the establishment of community-operated convenience stores that meet health standards and local regulations.

This innovative approach can empower the most vulnerable members of our society, enabling them to benefit from the Spaza shop ecosystem and fostering responsible and sustainable growth that ensures economic viability and the well-being of our communities.

Let us work collectively to create an inclusive and sustainable ecosystem, promising a brighter future for all.

Jacques Sibomana is the founder and CEO of Kuba.