Radical Economic Transformation: Local Spaza Shop Perspective

“Reclaiming Lost Market Share”

Terrain View & business Assault Strategy Formulation

“the truth is that local owned Spaza shops are failing, closing down; but foreign owned Spaza
shops are succeeding, we must ask the question (what are South African owned Spaza Shops
doing wrong when foreign owned Spazas are succeeding?)
1. Introduction
South Africa, like any other country in Africa and the rest of the world, is faced with the challenge
of creating employment for its people. With the unemployment rate being pegged at 25.5% (Stats
SA, 2015), South Africa needs to commit more resources to the small-business sector, in order to
enable emerging entrepreneurs to assume the role of employers (Ngek & Smit, 2013:7).
According to Fatoki (2014:5), the vital role of small enterprises in the creation of employment,
particularly among poor and low-income workers, needs to be appreciated, because of significant
contribution in terms of poverty reduction, economic growth and economic development.
The South African small-enterprise sector is divided into categories which largely depend on
turnover and the numbers of employees. Small businesses are widely regarded as a driving
engine in terms of economic growth and the creation of employment in both the developing and
the developed countries (Sunter, 2006:23). According to Ligthelm (2002:1), South Africa’s growth
in the retail sector was a result of the contribution which was made by Spaza shops, whose
revenues amounted to an estimated R7.2 billion in 2002. This statistic indicates the success which
Spaza shops have achieved in terms of reducing unemployment, while at the same time
encouraging the generating of incomes.
The government of South Africa has formulated supportive programs and created structures to
ensure that small-business enterprises are as productive as possible, with respect to the potential
contribution to the overall economy. At present the Ministry of Business Development is running
the Informal Traders Upliftment Project (ITUP), to support 1000 owners of Spaza shops and other
informal businesses throughout the country with skills and infrastructure (Zulu, 2015). The Survey
of Employers and the Self-employed (SESE) estimates that the informal sector accounts for
between 5 and 6% of the Gross Domestic Product, while at the same time contributing 15.8% to
the total employment of the country (Statistics South Africa, 2014). The government has
allocated R50 million for the roll-out of the Shared Economic Infrastructure Facility, which is
intended to support informal businesses, including Spaza shops (Zulu, 2015). In 2016, the
Minister of Small Business Development reiterated the fact that government’s Shared Economic
Infrastructure Facility is continuing to support the small enterprises in disadvantaged
communities of Mnambithi Municipality. However, it needs to be acknowledged that despite the
support programs being implemented by the government, the Spaza sector is faced with
numerous challenges, affecting in particular the South African operators adversely. According to
Plane (2015), the South African Minister of Small Business Development has stressed the need
for non-South African owners of Spaza shops in Soweto to share their business practices with
South African operators, in order to avoid being constantly harassed and attacked by South
Africans. Mbatha (2015) illustrates this point with the following quote from Zulu, the Minister of
Small Business Development in South Africa:
“Black people were never part of the economy of South Africa in terms of owning anything;
therefor when they see other people coming from outside being successful they feel like the
space is being closed by non-South Africans.”
This assessment clearly indicates the questionable extent to which South African entrepreneurs
are receiving support in order to withstand competition from non-South Africans. Despite the
support which the government provides to South African owners of Spaza shops at present,
South African entrepreneurs are still faced with many challenges in the same market in which
immigrant shop-owners are doing well. The reasons for which non-South Africans have been

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particularly successful in the Spaza industry ranges from application of innovative ideas, good use
of effective distribution networks, to unlimited use of unconventional initiatives in an endeavour
to maximise profit (Charman et al., 2012:78; Tengeh et al., 2012:6; Tengeh, 2013.4; Liedeman et
al., 2013:1-6; Piper, 2012:43; Basardien & Friedrich, 2014:2).
Despite all the interventions which have been made by the South African government to assist
South African entrepreneurs, the South African-owned Spaza sector is experiencing great
difficulty achieving growth. Various studies conducted on the performance of South African-
owned Spaza shops identified a number of constraints hindering the growth of small grocery
shops. Such constraints include but not limited to competition, a lack of support, crime, a
shortage of start-up capital, a lack of management skills, a lack of differentiated marketing and a
lack of adequate access to finance (Van Scheers, 2013:12; Charman et al., 2012:78; Van Scheers,
2011:5; Van Scheers, 2010:6; Tipple, 2005:611-632; Perks, 2010:4.).
2. Mangaung’s Situation
In Mangaung (Comprising of Bloemfontein Townships, Botshabelo, Thaba Nchu, Wepener,
Dewetsdorp, Vanstadensrus and Sout Pan), the study that was done by the Centre for
Development Support (UFS), indicated that in Bloemfontein Townships, grocery is mainly bought
at the major retail shops (Spar, Shoprite and Pic N Pay), in town or where such shops are based.
The study further pointed out that Spaza Shops mainly perform top up services, which means
people only buy small items for convenience purposes. Interestingly enough, a figure of over
R473 million rand per annum was what customers spent at Spaza Shops, this figure represents
purchases of small items only. Given the fact that the study was done after the first Xenophobic/
attacks, it is possible that the value of Spaza Shop Economy around Mangaung has more than
doubled and is now possibly close to 2 billion rands. The increase would have been fueled by the
increase in the number of people receiving social grants and the state led programs to reduce
poverty such as EPWP program, as well as the continuing growth of Townships around
Mangaung, Both formal and Informal.
These items were only the following: Bread, Airtime, Alcohol, Paraffin, Milk, Cigarettes and Cool
drink. Bulk grocery is mainly done at formal shops in Bloemfontein and Mangaung respectively.
Despite so much money exchanging hands across Mangaung Townships, the sad reality is that
the majority of Tuck-shops are now operated by foreign nationals, namely; Ethiopians,
Bangladeshis and Pakistanis. A large percentage of South Africans have been displaced in the
Tuck-shop industry due to stiff competition from foreign nationals, of the few that are remaining
in the industry, research indicates that they continue to lose market share due to strong
competition and the high crime levels relating to theft and robbery at shops. The reality is that
the money made by foreign operators ends up being shipped to their respective countries,
whereas if it gets spend locally and in other industries, it would contribute to job creation and
local economic growth.
3.Challenges Encountered by Spaza Shops
Despite the programs and policies which have been implemented by the government in order to
support the small-business sector, the establishment and sustainability of Spaza shops continue
to be plagued by obstacles and uncertainty. The view is supported by the findings of a research
study conducted by ABSA Bank Small Business, which revealed that 63% of small businesses fail
during the first 18 months of trading (Kumah, 2014:1-8).

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Almost all South African cities and towns have at least one Township associated with them, this
is also the case in the Free State. A number of Initiatives have been taken to renew, revitalize and
where possible develop many of those Townships including formalizing many of the Informal
Settlements. It is within these Townships that many Small Businesses are struggling for survival
and growth; observing the situation in his book, Fuller (2003:297) emphasizes that to develop
the South African economy, things need to be done at the smallest scale in every Township; as
many Spaza Shops are based in the townships and informal settlements, their challenges are
mostly related to township economic revitalization. They are mainly phased with the following
challenges;
3.1. A Lack of Start Up Capital
Although it is true that all businesses require an adequate amount of start-up capital in order to
establish themselves effectively, most owners of Spaza shops have great difficulty meeting this
initial requirement (Van Scheers, 2010:6). Access to funding usually presents a major obstacle
and the little capital raised usually comes from personal savings and borrowing from friends and
relatives. Owing to severe limitations with respect to start-up capital, most Spaza shops start with
little capital and stock, which makes rates of expansion very slow (Dickey, 1994:14). The small
amount of capital investment inevitably creates a weak foundation for the business to take off
effectively. A lack of capital certainly affects not only the amount of stock with which owners are
able to start businesses, but also the spaces in which businesses are operated and other related
infrastructure.
3.2. A lack of savings and collateral
In order to obtain funding from the banks, owners of Spaza shops are required to present proof
of savings and to have adequate collateral security. Financial institutions also require prospective
owners of businesses to compile proper business plans, which is beyond the capabilities of most
prospective owners of Spaza shops. At the same time many are unable to put down financial resources
due to having not worked as a result of high unemployment levels.
3.3 The cost of business resources
Limited start-up capital results in businesses having limited or no business resources such as
delivery vehicles, technological equipment and human resources. Limited resources also result
in inadequate security systems, with burglaries adding to the costs of running small businesses
(Van Scheers, 2010:6).
3.4 A lack of experience in business management
Even in those instances in which start-up capital is available, a lack of experience in business
practices can make the first few months or years of running a Spaza shop very difficult for most
emerging entrepreneurs. A lack of experience in business management has dire consequences,
as it inevitably inhibits the effective taking off of a business. Most Spaza shop operators do not
have the much needed business management that are vital for all start-up businesses. This
include knowledge of finance, administration, marketing and human resources, including
leadership skills.
3.5. A lack of government support services
According to Van Scheers (2010:6), owners of Spaza shops are adversely affected by inadequate
safety and security measures and services from the government. There is great concern among
many owners concerning the lack of support which is given to emerging entrepreneurs who have
started businesses. They believe that once in business, further support with respect to safety,

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training and the acquisition of necessary skills is needed to assist to develop businesses in a
sustainable manner.
3.6. A lack of networks
Owners of Spaza shops suffer from the effects of a lack of effective networks. In the absence of
sustainable networks, they are unable to make the contacts which benefit businesses. The same
applies to bulk purchasing, which cannot be done if owners do know how to network and to act
collectively in order to make combined bulk purchases. Effective business networks are
extremely beneficial, owners benefit from the contributions made by reliable counterparts and
also by the distributors of goods and services, all of which make a positive contribution to the
growth and development of businesses (Nieman & Nieuwenhuizen, 2009:192).
3.7. Stiff Competition
Competition occurs when different businesses are selling the same products and services to the
same market (Lamb, Hair, McDaniel, Boshoff & Terblanche; 2008:100). In most cases competition
benefits consumers, as it tends to improve the quality of service and products. While there are
undoubtedly other factors which affect the growth of Spaza shops, increased competition has
been singled out by Van Scheers (2010:6) as being among one of the most significant factors
which slows the growth of Spaza shops, particularly South African-owned ones. According to
Liedeman et al. (2013), foreign owners of Spaza shops, particularly Somalis, are out-performing
South African owners to a very significant extent.
The stiff competition that adversely affects the growth of South African-owned Spaza shops
emanates from two sources, namely, non-South African owners of Spaza shops and the well-
established businesses which operate in the malls. Most small businesses tend to concentrate on
one specific line of business and in the case of the Spaza shops in the townships the emphasis is
on groceries (Bowen et al., 2009:2), resulting in a duplication of businesses operating in the same
markets, which provides evidence of a lack of information concerning these markets and a
corresponding lack of innovative entrepreneurship.
3.8. High Transport Costs
The prices of goods purchased from Spaza shops are also affected by high transport costs.
Ligthelm (2002; 2005b) and Kassim and Hendriks (2002:35) explain that informal businesses,
including Spaza shops, usually make use of public transport and privately-owned cars to transport
purchases from wholesalers and other related suppliers. With the rising cost of fuel, owners of
Spaza shops have to contend with the high costs of making several trips in order to transport
purchases to business premises. Spaza Shops traditionally were having the ability to charge high
prices due to lack of competition and the convenience service they provide far from main
supermarkets, however, with massive competition such model no longer works, as consumers
are price sensitive.
3.9. A lack of financial support
Informal businesses can grow in a sustainable manner if the necessary financial support is given.
This point has been made by Van Scheers (2010:6), Ligthelm (2005b) and Gough et al. (2003),
who point out that most owners of informal businesses have cited a lack of financial support as
a major constraint which impedes the growth of businesses. Although it is true that loans can be
obtained, it is not always easy to do so, particularly in communities in which most entrepreneurs
are from low-income backgrounds (Rolfe et al., 2010:12; Chan, 2008).

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Obtaining financial support is made particularly difficult by the fact that records of the
performance of most of these informal businesses are not easy to obtain, which tends to dissuade
institutions that are in a position to extend credit from taking abnormally high risks, which is
further aggravated by a lack of guarantees in the event of non-repayment (Mbonyane, 2006:18).
Because it is not easy to obtain loans from banks, most owners of Spaza shops resort to using
personal savings and asking relatives and friends for financial support, without which shops
would be at a great risk of closing down (Ligthelm, 2005b:206; Gough et al., 2003).
3.10. A lack of business skills
Spaza shops can survive and achieve growth only if owners have the required business skills. A
number of writers and researchers have agreed that in the absence of business skills, owners of
Spaza shops will find it difficult to cope with the demands of achieving sustainable growth in
businesses (Rolfe et al., 2010; Perks, 2010). According to Perks (2010:448), a diverse range of
business skills is required and all are vital for the effective running of a business, and these skills
are;
3.11. Marketing
Most local Spaza Shop operators lack the marketing strategies which would enable them to be
more competitive than their rivals. Most of them do not know how to approach the market and
tend to perceive it as being homogeneous. In the absence of customer focus, integrated
marketing communication and market focus, the owners of most Spaza Shops find it extremely
difficult to operate in markets where overall understanding is generally poor. In addition to poor
marketing research, Spaza Shop operators tend not to make good use of effective pricing
strategies (Cant et al., 2013:6).
3.12 Crime
The success and growth of businesses, particularly small businesses such as Spaza Shops, is
affected by the high rates of crime faced by South African markets (Van Scheers, 2010:6).
Although there has been a general decrease in the incidence of other categories of crimes, the
incidence of crimes affecting businesses is showing no signs of decreasing, most of crimes occur
in the informal settlements and townships of South Africa, where small businesses such as Spaza
Shops are victims of organized crime. Although Spaza shops have potential for growth and to
create much-needed employment, factors such as crime serve to hamper both growth and
success (Van Scheers, 2010:6). Crime constitutes a major constraint and has a negative effect on
the sustainability of Spaza shops (Bear, Tladi & Pedro, 2004:3).
4. Strategies employed by immigrants to run their Spaza shops and out-compete locals
Immigrants who own Spaza shops in the townships of South Africa have proved to be working
significantly more effectively than South African owners in the execution of the business
operations. Foreign owners of Spaza shops employ several business strategies giving an edge
over South African counterparts, including bulk buying, which results in larger discounts from
suppliers (Liedeman et al., 2013:1-6; HSRC, 2014:12). Buying in bulk has an advantage in terms of
obtaining larger discounts, enabling entrepreneurs to offer products to consumers at lower
prices than competitors. Foreign owners have a strict culture of saving and very often choose to
forego all luxuries in the interests of ensuring the growth of businesses. Immigrant traders tend
not to lead extravagant lifestyles and, as a consequence, are usually able to save money in order
to finance the expansion of the businesses. The money which is saved by foreign owners of Spaza
shops is used to buy delivery vehicles, further expansion of the businesses and also to invest in

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marketing strategies such as the use of billboards. The extending of credit to customers is used
to strengthen social ties with the members of the communities which they serve and also to
strengthen the loyalty of the customers (HSRC, 2014:12). The overall result is increased volumes
of sales, which, in turn, result in improved profit margins. Immigrant entrepreneurs have forged
strong social relationships with the people in the local communities by learning the local
languages, which has enabled business operation less stressful. Strong business networks have
enabled foreign owners to network in order to obtain supplies at the lowest possible prices.
Immigrant owners of shops tend to support fellow countrymen by advancing start-up capital.
Once in business, the people who have borrowed start-up capital are allowed to operate
businesses for a certain period, in order to allow the loans to be repaid completely, after which
they are enabled to make the transition from renting businesses from the people who have
supplied the start-up capital to buying outright (HSRC, 2014:12). Although it is true that crime
constitutes a significant constraint for small businesses in South Africa, immigrant traders have
invested in security, by ensuring that the shops have burglar bars and small windows.
Another strategy used by immigrant traders, is explained by Gumbo (HSRC, 2014:12), positioning
of shops near street corners, in order to improve visibility for customers and, by doing so,
increasing the attraction which their shops have for customers. Immigrants use brightly painted
graphic billboards and also the of use local names for shops, in order to create a sense of
belonging and familiarity.
Foreign owners of Spaza shops use a pricing strategy which South African owners are unable to
understand. Research has proved that the prices for items such as bread, rice, maize meal, milk,
and eggs are generally lower than those of South African counterparts, which has attracted
customers to a significant degree, to the disadvantage of South African owners of Spaza shops
(HSRC, 2014:12). The pricing strategy used by non-South Africans has strained the resources of
South African owners as they try to compete with little success, which indicates why some have
decided to rent out premises. According to Liedeman et al. (2013), Somali owners of Spaza shops
have a huge advantage over South African owners with respect to certain key items as Somalis
purchase directly from wholesalers, items such as sugar, and instances of bulk procurement
ultimately determines the prices at which the products can be sold.
According to the HSRC (2014:12), the business strategies listed in the table below are used by
immigrant owners of Spaza shops.
4.1. Strategies used by non-South Africans: Table
STRATEGY KEY FINDINGS

Mentorships High reliance on mentorship by relatives

Strategic location Street corners to maintain visibility

Huge stocks Stock to meet demand

Strict saving Maintain simple lifestyles to save for the business

Small Profit Quick Aim not to maximise profits at once, for example only 20c profit is
Returns made on a loaf of bread

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 Long operating hours Operating hours are usually from 6am to 9pm

Aggressive marketing Advertising using bright paintings, product names and local shop
names.

Network Social, religious, migration and business ties

Adaptation Language, customer preferences and expectations

(Adapted from the HSRC, 2014:12)

The most effective way to attract customers is to stock a wide variety of products. According to
Liedeman et al. (2013), immigrant owners of Spaza shops are dominating the market because of
ability to diversify the product ranges. After the democratically-elected government of South
Africa came to power, there were generally improved income levels for the households in the
townships, which resulted in an increased demand for and consumption of certain products.
Consequently, the Spaza shops, particularly the foreign-owned ones, began to invest in
diversifying the ranges of products, in order to cater for the increased needs of households whose
levels of income had increased.
The non-South African owners are able to obtain cheap labour by employing citizens of the
former countries, who are often prepared to earn low wages in order to secure employment. As
foreign owners are generally financially better equipped than South African counterparts, they
are able to take advantage of supply chain. On average, foreign owners of Spaza shops have
startup capital amounting to in the region of R45,000, compared with an average startup
capital of R1,500 for South African owners (HSRC,2014:12). This competitive advantage,
coupled with ethnic business networking, has promoted the growth of the foreign-owned
shops.
4.5. South African-owned Spaza shops vs foreign-owned Spaza shops
According to Basardien and Friedrich (2014:2), “… the business practices between local and
foreign Spaza entrepreneurs are significantly different and are primarily caused by cultural
differences and experiences of individuals involved. Non-South Africans are more collectivist in
nature while locals are more individualistic. The distinct differences between the two groups
have resulted in differences in buying methods, where non-South Africans do collective buying
and thereby qualify for bulk discounts which impacts directly on the pricing strategies and
competitiveness”. These differences have also been identified by the Charman et al (2012) and
are summarized in the following Table.

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Differences between South African and non-South African Spaza shops: Table
Characteristics Foreign-owned Spaza shops South African-owned Spaza shops
Capital High competitive advantage South Africans have an average startup
investment resulting from the scale of capital investment of between R1,500
investment, with an average of and R5,000, which is very low
R45,000 for startup businesses

Benefits of ethnic business No collective purchase and consequently

networking enables foreign a lack of greater economies of scale
Spaza shops to purchase within
buying collectives and achieve
greater economies of scale

Stock Successfully use supply chain
procurement networking and price
discounting to procure goods
in a cost- effective manner.
Each business benefits from a
procurement and distribution
chain which supports multiple
stores
Unable to match the supply chain
networking, price discounting, collective
purchasing power and labour advantages
of the foreign-owned businesses and
have opted either to close their shops or
to concentrate on commodities which
enable them to sustain a competitive
advantage, such as take-away food and
liquor

5. Need for Intervention Program

The government has identified the promotion of the establishment of Spaza Shops as a means of
eradicating poverty and reducing levels of unemployment in the townships. While it is a fact that
Spaza Shops need to be promoted in a sustainable manner, most of are struggling to achieve
growth as a result of intense competition (Ligthelm, 2007). As the Spaza sector is attracting a
great many entrepreneurs, the sector is becoming highly populated and, as a consequence,
survival depends upon owners becoming skilled in business management and marketing. The
inescapable conclusion is that at present, owing to a lack of business skills, most owners of Spaza
shops are finding businesses increasingly less viable, as a result of stiff competition, one
observation is that, local Spaza Shops are failing, closing down, but foreign owned Spaza Shops
are succeeding and they continue to open new Spaza Shops daily, we must ask the question
“what are South African Spaza Shop operators doing wrong where foreign owned Spaza Shops
are succeeding?”.
At the time of the attainment of democracy, the townships of South Africa were dominated
mainly by informal businesses and the potential for the growth of Spaza Shops appeared to be
great, but the mushrooming of shopping malls in the townships has been accompanied by
competition which the owners of Spaza Shops cannot withstand, from large-scale retailers, who
are able to sell at far lower prices. Recent studies of shopping malls have indicated that small
businesses are recording lower sales, owing to competition which emanates from large chains

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such as Shoprite and Pick n Pay (Cokayne,2007:1). According to Cokayne (2007:1), 75% of the
small businesses in Soshanguve which are located less than one kilometer from shopping malls
suffered a downward profit trend, compared with 36.8% for those located more than five
kilometers away. A similar study conducted in Mumbai in India it was found that 71% of small
businesses close to the shopping malls suffered a decline in both profits and volumes of sales,
while 18% of the businesses which were located far from the malls had experienced unchanged
business trends (Cokayne, 2007:1). The large-scale retailers bring a wide variety of products,
accompanied by the added advantage for consumers of lower prices (Kalhan, cited by Rolfe,
Woodward, Ligthelm & Guimarães; 2010:18).
Another dimension identified by the Centre for Development Support is the competition from
foreign entrepreneurs in the Spaza sector. As a result of effective distribution networks and
superior bargaining power in negotiating discounts; foreign owners of Spaza Shops in Mangaung
have managed to outclass and out-perform South African owned shops, and, in turn, has resulted
in tension developing between the two groups, owing to a clash of business interests. The same
study concluded that violence in Mangaung had not been caused by xenophobia, but by
competition in business, which had seen immigrants competing at a great advantage over South
African owners of Spaza Shops. It was also observed that South African owners of Spaza Shops
usually have little capital, lack distribution networks and have limited varieties of products. The
findings are also supported by Liedeman et al. (2013:3), who explain that foreign owners of Spaza
Shops deliberately position shops to outclass South African owned entities by using attractive
means to win customers, such as offering discounts and keeping well-stocked shops.
5.1. Objective of Intervention Program
The overall objective of reclaiming lost market share of local Spaza Shop operators is nothing
else, but to get people through the front door of the local operators stores. (help local operators
to be able to run their businesses efficiently, make more sales which will result in more profit and
improvement in their welfare).
5.2. Network Set Up as a Business Strategy
Research has proven that it is very difficult to provide assistance or intervention to local operators
in current manner they are operating. It is highly costly and difficult to provide any intervention
or support that may be trade related training or otherwise related to Spaza Shop operators since
most are them operate individually and are scattered over a large area covering numerous
townships. As such there is a need to form a network that will provide the necessary intervention
support and is mainly focused on improving the operators’ situation.
The network will mainly comprise of local Spaza Shops and local Grocery Stores owned and
operated by locals in townships, they will fall under one trade network but are individually
owned. The network sources and coordinates all needed support and delivers such support to
network members, be it training, access to funding, branding and including central marketing and
promotions, and store improvements. The items to be made available shall be evolving and
mainly focused on improvements to bottom lines for each store.
5.3. Improve access to relevant Information
one of the challenges phased by local operators is lack of access to relevant information and advice
relevant to the sector they are in, since most of them were unemployed and had started their
businesses as a survival strategy. It is clear they not well prepared to deal with the dynamics of the

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business environment and many lack business professionalism and business acumen to handle
their businesses in a competitive manner, in other words, they lack resilience.
5.4. Service Providers network
One of the critical and important networks needed is the set-up of service providers network, this
network is of different businesses that are of strategic value or service to the success of local Spaza
Shops, these service providers are to be approached in wholesale format, in other words they
provide strategic service to the whole network and their costs or support is based on that format.
An example includes the acquisition of advertisements services for the network, and things such
as financial literacy training and or bookkeeping services. This is mainly to bring down the costs
related to important services needed for the success of local Spaza Shops.
6.Benefits of intervention Program
6.1. The pattern of ownership indicates that entities with common interests (either shared
ownership or ethnic networks) have obtained a monopolistic position within geographic areas.
Once localised competition has been eliminated, these groups increase prices and locals are left
to fend for themselves. The program shall make sure that prices remain affordable for low income
earners.
6.2. the position of the small South African Spaza Shop Operator is constantly deteriorating if not
extinct, as foreign Spaza Shop operators have harmed the livelihoods of South Africans operating
the Spaza Shops. The intervention is bringing back the lost livelihood of locals and giving them the
ability to feed their children and look after their families.
6.3. The large portion of the economic value generated within the Spaza Shop market (including
wages) is exported from the township economy to the home base/ country of these foreign
entrepreneurs and workers.
6.4. Foreign Spaza Shop operators have no interest in investing in the local economy, since they
have to send money back home, this is also evidenced in the container shop they operate from,
whereas locals build shops in brick mortar which further creates jobs for locals.

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