Shoprite spazas serve eKasi



On the main road in Zonkizizwe township in Katlehong on the East Rand stands an umissable container spaza shop embellished in yellow and red. The structure has a big board erected on top of it, screeching “Usave eKasi”.

The street is busy, populated with cars, children walking back from school, adults going about their business and street vendors.

People enter the store and others leave carrying a Shoprite “plastic” containing goods they have bought, till slip in hand to get the security guard to sign on the way out.

Shoprite’s Usave eKasi stores, which it has begun rolling out in townships, are between 100m2 and 200m2. Shoppers canvassed by the Mail & Guardian in Zonkizizwe said they were relieved to have a grocery store near to where they lived.

The eKasi stores are part of a decision by Shoprite, which had a turnover last year of R290-billion, to dramatically improve its presence in locations typically catered for by spaza stores. The group said it
was establishing “smaller store formats across all its supermarket brands in previously underserved markets in communities and neighbourhoods across the entire consumer market”.

Across from the Usave container, which was buzzing with activity, a Somalian entrepreneur, standing behind bars and with a near-empty store of just two or three customers, told the M&G that the Usave store had taken almost 80% of his customers.

“But there’s nothing I can do because customers choose where to buy,” he said.

Usave store manager Eugene Moshwane said his store is busy — and it’s like that throughout the month. He said the store does not sell red meat and vegetables because it is tiny and can only stock necessity products.

“Everything found in this store is specifically arranged for what customers buy.” He stocks fewer nonfood items because customers do not demand them.

The shelves were stacked with essentials such as sugar, tea, coffee, cooking oil and tissues as well as staples such as mealie meal, bread, canned products and frozen mixed chicken. Other goods include mayonnaise, toothpaste, sanitary pads and snacks.

“Here, we sell! When time goes by, customers come in their numbers and you need to serve them as quickly as you can,” Moshwane added.

Usave eKasi is small, but still has three cashiers, two packers, the manager and his assistant. Most of the workers come from Zonkizizwe, whereas others come from Vosloorus, 10km from the shop. A few come from Spruitview, 12km to 20km away.

Locals say they welcome the arrival of the store and are happy as it is within walking distance.

A customer, Smith Mkhwanazi, said: “We used to suffer a lot, we would buy at Chris Hani Mall in Vosloorus. Usave helped a lot. And most of the things we can get here.”

Shoprite says: “Usave is a hard discounter and offers a limited assortment of products, including its own Ubrand range which consists of 225 products across almost all categories, from toiletries and cleaning products to pasta, canned foods, fruit, sweets, chips and condiments.”

Mbofholowo Tsedu, senior researcher at Trade and Industrial Policy Strategies (TIPS) says Shoprite’s decision to extend its reach into townships was not surprising given the economic conditions and market pressures on large retailers.

“Townships have always served as retail and consumer markets, [and] this strategy allows Shoprite a larger footprint with direct access to more clients,” he said.

Tsedu says placing container stores, such as the one in Zonkizizwe, and other “mini shops” in the townships could be a win for both the store and its consumers. He says placing their stores closer to consumers will strengthen its supply chain with more orders from these smaller outlets. He added that “consumers will also gain through reduced travel times, the convenience of being closer to shops and hopefully, comparably cheaper goods.

“With townships being such large population centres it can be said that there is money to be made there,” said Tsedu.

Though townships were historically ignored in favour of larger town centres, “increased disposable incomes in the townships make them an opportunity not to be missed”.

Zonkizizwe can be a tough neighbourhood. The store faces issues, including a recent robbery where a group of men entered the store to steal money. Moshwane says he had to close the store previously, during a service delivery protest, to ensure products were protected.

Shoprite results for the first six months of 2019, released two weeks ago, showed a 18.2% decline in after-tax profits to R4.2-billion.

Shoprite said the constrained economy, inventory shortages, industrial action and the implementation of a new IT system across its store base enterprise-wide resulted in lost sales, meant it managed to grow sales by a mere 3.6% to R150-billion for the period.

Shoprite did not respond to questions about how many Usave stores it planned to roll out in townships.

Tshegofatso Mathe is an Adamela Trust business reporter at the Mail & Guardian

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Tshegofatso Mathe
Tshegofatso Mathe is a financial trainee journalist at the Mail & Guardian

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