Competition Commission hears township trading under strain

The grocery retail sector has come under the spotlight after Massmart complained that the bigger players block rival companies by means of exclusive mall leases.

FILE: A spaza shop in Nomzamo in Cape Town. Picture: Thomas Holder/EWN

JOHANNESBURG - The Competition Commission in the grocery retail market inquiry has heard how bigger retailers who venture into townships leave little room for smaller independent retailers to grow.

The big four retail companies, namely Shoprite/Checkers, Pick n Pay, Spar and Woolworths have been accused of destabilising township economies and putting spaza shops and local supermarkets out of business.

The commission is holding a week-long hearing into the sector, after allegations that consumers may be affected by collusion.

The grocery retail sector has come under the spotlight after Massmart complained that the bigger players block rival companies by means of exclusive mall leases.

EST Africa's Louis Greef confirmed this speculation to the panel.

"Township trading and spaza shop trading is under strain."

Johannes Msibi, a local bakery owner, testified that he lost customers when Shoprite came into his township.

Greef says small retailers aren’t set up to compete.

“If I have a house store, I’m trading from my kitchen with a limited number of items available. How do I reduce my overhead expenses?”

The hearings started in Pretoria on Monday and will continue on Tuesday.

(Edited by Shimoney Regter)