Spaza shops more expensive: Nafcoc

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Ntomboxolo Makheta waits for customers in her spaza shop in Ramaphosa informal settlement. Spaza shops in the townships are more expensive than shops owned by foreigners and large retail shops, Nafcoc said. File photo: Antoine de Ras

Johannesburg - Spaza shops in the townships are more expensive than shops owned by foreigners and large retail shops, Nafcoc said on Thursday.

This was according to phase one of its first Township Monitor Index study conducted in a formal township (Soweto), semi-formal township (Diepsloot) and a rural township (Sebokeng), it said.

The aim of the study was investigate the causes behind the collapse of township businesses, said National African Federated Chamber of Commerce and Industry (Nafcoc) economist Katleho Bohloa.

The study compared the prices of goods in large retail stores such as PicknPay, Shoprite and Checkers, foreigner-owned retail shops and South African-owned retail shops, known as spaza shops.

The findings showed that products such as bread, milk and margarine, were more expensive in spaza shops.

The prices of goods were first compared at the end of the month and then in the middle of the following month to analyse price differences during the different periods.

The prices in all the townships were relatively higher at the end of the month than during other periods.

The price differences between the two types of shops could be attributed to weak buying power.

“Spaza shop owners, unlike the foreign nationals and large retailers, do not buy in bulk, and therefore do not achieve the same level of discounts from their suppliers,” Bohloa said.

“Considering their sheer numbers, if spaza shop owners combined resources to do bulk-buying, they would achieve greater supplier discounts and become highly competitive.”

The findings also showed that most spaza shops were located in residential areas, with home-owners turning parts of their houses into a 'spaza'.

Foreign-owned shops were mainly situated in busier locations such as taxi ranks, next to shopping malls or main roads.

The results showed that spaza shops had less brand variety than foreigner-owned shops, and thus the price differential between different brands was lower.

The study was launched at Nafcoc's 49th national conference in June.

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