The growth challenges of native-owned spaza shops in selected townships in South Africa

Abstract

Albeit the efforts and contributions made by the government of South Africa to support the growth of spaza shops, it is perhaps startling to note that the majority of the indigenous spaza shops struggle to grow as anticipated. Aim: Against the just mentioned backdrop, it was deemed necessary to understand the hurdles that prohibit the growth and development of native-owned spaza shops in two prominent townships in Cape Town. Method: Rooted in the exploratory and descriptive research designs, the quantitative empirical research approach backed by a self-administered questionnaire was utilised to collect the data. The 121 questionnaires that were fully completed and returned were analyzed using the latest version of Statistical Package for the Social Sciences (SPSS) software with a particular interest in the descriptive output. Results: Among others, the following came to the forefront as inhibitors of growth: circumscribed expansion capital, competition from non-South Africans and large-scale retailers operating in malls, crime, transportation of stock, inaccessible loans, woeful handling of financial records, lack of management skills and poor marketing and lastly limited information on government services. Recommendations: Assuming the foregoing results, one propounds that Native spaza shop-owners should endeavour to plough back part of the profits earned; sought business training for family members; diversify the product range, and secure business premises. Implications: while aligned to the Native-owned spaza shops in the selected townships, informal traders, related businesses, other townships, academics and policy makers may draw vital lessons from this study.