Shoprite is accelerating the roll-out of its Usave eKazi container stores in South African townships. The eKasi brand is Shoprite’s smaller store format — targeting previously underserved informal markets in South Africa.
Usave eKasi is much smaller than Shoprite’s other formats, but much larger than a traditional spaza outlet. Shops range from 100m² and 200m² and have three cashiers and two packers. Shelves are stacked with essential consumer goods such as sugar, tea, cooking oil, maize, rice, bread and canned products. The store also stocks personal care items such as toothpaste, tissues, and sanitary pads. Shoprite’s Usave is a hard discounter and offers a limited assortment of products, including its own Ubrand range which consists of 225 products.
Shoprite’s decision to extend its footprint into townships would likely be a win for consumers who often need to travel long distances for lower-priced goods. Townships were historically ignored in favour of shopping malls and town centres, but an increase in disposable income and a growing population, make them an attractive market for modern retailers. Traditional trade is estimated to contribute around 35 percent of total grocery sales in South Africa.
However, the arrival of Shoprite in townships is bad news for spaza shops. Local shopkeepers are under increased pressure from modern trade and foreign traders setting up shop. South Africa’s traditional trade, has seen more arrivals from Somalia, Ethiopia, Eritrea, Pakistan, Bangladesh and China.
Research has shown that foreign-owned groceries create jobs and employ mostly locals. But small locally-owned grocery numbers are dwindling — creating tension. The country has suffered from xenophobic attacks that first started in 2008, and flared up more recently. Shoprite’s arrival might add Ubrand cooking oil to the fire.