Consumers shift to spazas

accreditation
An Orabi resident stands near a Spaza Shop in the village. photo. Jonathan Burton. Picture: Lucky Nxumalo
An Orabi resident stands near a Spaza Shop in the village. photo. Jonathan Burton. Picture: Lucky Nxumalo

South Africa has about 140 000 independent retail outlets, including spaza shops, that have annual sales of almost R71 billion, according to the latest Nielsen’s annual Shopper Trends Study.

Nielsen consumer insights director Esti Prinsloo said: “People are reverting to local as they’re not willing to travel to supermarkets due to the rising cost of transport. They’re therefore looking for stores close to where they live or at places where they catch transport.”

South Africans are also shopping more frequently at spaza stores.

“Spaza shops are ideally positioned for small top-up occasions because they are conveniently situated on commuting routes and close to their shoppers’ homes,” Prinsloo said.

South Africa has 2 500 modern trade and 140 000 traditional trade outlets, including spazas. These outlets contributed R316.5 billion towards South Africa’s annual retail sales for the year to March, with spaza shops accounting for 22.3%, or almost R71 billion, of these sales.

Nielsen found that spaza shops were recording “exceptional growth”, with an increase from 45% to 53% of local modern trade shoppers that use spazas.

In South Africa, the study surveyed 2 500 consumers between the ages of 18 and 65. The pool was balanced by demographic and made up of a mix of male and female buyers who purchase groceries from modern trade outlets in urban areas.

Prinsloo said: “Even though spend is still higher in modern trade, there is strong sales growth coming through in traditional trade outlets, with spend in urban independent shops [mostly spazas] growing at 13.4% in the year ending March, and rural outlets growing at 2.3%. This is in comparison to hypermarkets, which grew by 4.8%, and supermarkets by 8.6%.

“It should be noted, however, that spaza stores are only one channel within a much larger collection of traditional trade stores, which include small independent grocers, self-service walk-in outlets and counter-top formats.”

Another significant development is a shopper shift away from hypermarkets – the numbers are down from 21% in 2015 to 14%
last year.

Nielsen put the growth in the traditional trade sector down to tougher economic conditions, which are causing behavioural changes as consumers struggle financially and as cost saving has become the norm.

“In 2015, we predicted that a decline in disposable income would have a significant effect on grocery shopping. This has now come to fruition. Last year, we saw consumers reducing spend on ‘nice to have’ items and buying them less frequently,” Prinsloo said.

“In several categories, shoppers have also moved to smaller pack sizes to get to the affordable price point, or larger pack sizes to make use of the value offering when they can afford it.”

The number of shoppers who follow a strict budget also increased from 71% in 2015 to 73% last year.


We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For 14 free days, you can have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today. Thereafter you will be billed R75 per month. You can cancel anytime and if you cancel within 14 days you won't be billed. 
Subscribe to News24
Latest issue
Latest issue
All the news from City Press in PDF form.
Read now
Voting Booth
Damaged traffic lights and load shedding have led to a mushrooming of informal traffic controllers – mostly homeless people or beggars – in Joburg's major intersections. What are your thoughts?
Please select an option Oops! Something went wrong, please try again later.
Results
We need them
14% - 25 votes
Deploy professionals
48% - 87 votes
They pose more disorder
19% - 35 votes
They must be paid
20% - 36 votes
Vote