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The Changing Retail Landscape In South Africa

Retail is a constantly changing industry and it is the retailers who are able to respond most quickly to changing shopper needs, who are most successful.

Most of the competition for the small retailer comes from Independent and Modern Trade.

The large independent and modern retailers are growing their businesses by introducing new formats, like:

  • liquor stores
  • pharmacies
  • hardware
  • and in some cases, furniture

When these new formats are placed in the vicinity of traditional supermarkets, they attract more people. The fact that  these different formats are all found close together in a business area means that the shoppers can go to the supermarket, pick up their medicine at the in-store pharmacy, and also their drinks for the braai or ‘shisa nyama’ they’re having with friends, all in one place. This is very convenient and appealing to the modern, time-pressed shopper.

Another reason for this growth in store numbers is the growing number of consumers moving to towns and cities from the rural areas. Modern Trade is building new stores in shopping centres to meet the growing demand. Many retailers are also growing the number of stores in the rural areas, taking modern retail stores into areas that hadn’t been previously serviced.

There has been significant growth in forecourt stores over the last five years and they are increasingly becoming a competitor for independent retail. These retail shops at petrol stations, open for extended hours and sometimes 24 hours a day, stock a limited range for commuters and passersby. It is estimated that there are over 5,000 forecourt convenience stores in the country and although people know they will pay a bit more, they shop at them for convenience.

Most of these stores also offer a range of value-added services such as:

  • Take-away food,
  • ATMs,
  • Car washes
  • And Lotto.

The promotions that they run are often banded promotions.

Example: Can of cool drink + pie + chocolate at a discounted price.