The retailer is helping to revitalise the township economy in partnership with the Gauteng Department of Economic Development (GDED). Shoprite’s competitor Pick n Pay, has partnered with independent traders and upgrading existing spazas. Shops range from 100m² and 200m² and have three cashiers and two packers. Usave eKasi is much smaller than Shoprite’s other formats, but much larger than a traditional spaza outlet.
South African retail giant Shoprite is taking note, and is accelerating the roll-out of its Usave eKazi container stores in townships. However, with an increase in disposable income and a growing population, it is making them an attractive market for modern retailers. Many consumers would like to shop closer to home, but townships were historically ignored by large companies in favour of shopping malls and town centres. Township dwellers are often excluded from low prices and items they need most, are often out of stock. Shoppers often have to walk back from the taxi drop-offs with heavy grocery bags. Most rely on public transport and a trip to large shopping malls is costly, stressful, and time consuming in long taxi rides. Informal trade is growing at 10% a year, but for many South Africans living in townships, shopping is a logistical challenge.
It is estimated that 90% of transactions are in cash, making them vulnerable in a country with a high crime rate. Spaza shops are the backbone of township economies, but the lack of credit and struggles to compete with modern retailers are serious challenges they face daily. They add R120 billion ($7 billion) to the local economy a year, and with other forms of traditional trade, contribute 35 percent of total grocery sales in South Africa. There are over 150,000 spaza shops or small informal groceries in operation in South Africa.
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