Con­sumers shift to spazas

CityPress - - Business - JUSTIN BROWN justin.brown@city­

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, self­ser­vice walk-in out­lets and coun­ter­top 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.

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