The growth of shopping malls in townships will offer residents lower prices but could hurt small retailers, according to a University of South Africa (Unisa) study released on Monday.
The recent opening of a shopping mall in Soshanguve, north of Pretoria, resulted in 75% of businesses less than 1km, or 15 minutes walking time away, reporting a decline in profits.
This was contained in a study by Professor Andre Ligthelm of Unisa’s Bureau for Market Research (BMR).
Only 36,8% of shops located between 4km and 5km, about one hour’s walk from the mall, experienced a drop in their profitability.
Convenient access, lower prices and a greater range of goods ”would suggest a negative effect” on the turnover and employment of small township retailers and spaza/tuck shops, wrote Ligthelm.
In the last year more than five shopping malls had been built in Soweto to encourage people to rather spend on their own doorstep.
Before 1994, with the majority of township workers employed far from their homes, most of their shopping was done in the main city centres or at shopping malls at the fringes of townships.
Soweto households spent only 25% of their retail expenditure at outlets located within Soweto. This percentage was only 9% for the most affluent, and 49% among the poorest households, according to a study commissioned by the City of Johannesburg in 2004.
This indicated that poorer households in townships were subject to relatively high prices and limited expenditure choices.
Since the mid-1990s, however, many township residents had progressed to a middle-income group, resulting in a substantial increase in spending by them in these areas.
In addition, almost three quarters of this middle-income group either planned to live in townships for some time (29%) or had no intention of moving (43%), wrote Ligthelm, quoting a recent survey by Glue Metric.
The BMR at Unisa estimated that spaza shops and hawkers employed close to 750 000 people in 2004.
Ligthelm mentioned that the distance of small retailers to shopping malls and effective customer service on a small, dedicated assortment of merchandise could result in the survival of some of these small retailers. — Sapa