Township economy: S.A's first spaza-to-store opens in Soweto - CNBC Africa

Township economy: S.A's first spaza-to-store opens in Soweto

Southern Africa

by Tendai Dube 0

South Africa's Pick n Pay spaza-to-store refurbishment. Photo: Wikipedia

The first ever spaza-to-store conversion opened on Thursday in Diepkloof, Soweto, the pilot project in a newly formed partnership between the Gauteng Department of Economic Development and giant retailer, Pick n Pay.

Monageng Market has traded in Diepkloof for over 40-years and is currently run by the second generation, Solomon “Solly” Legae and his wife Elizabeth, with their family.

The project is part of the GDED’s (Gauteng Department of Economic Development) programme to economically revitalise townships.

However as Chris Reed, Group Executive for Franchise at Pick n Pay explained, the trading environment has become difficult with new entrants competing for the the same market.

“Many independent township traders are experiencing tough times as the economy tightens and competition becomes more intense.  Pick n Pay’s successful franchise operation has been a strong base for many years for developing new entrepreneurs and building new business leaders, including young black entrepreneurs,” said Reed.

He adds: “We are excited about adapting strong elements of our franchise model to support independent SMMEs and make a contribution to the economic revitalisation of township communities.”

Pick n Pay suppliers helped by refurbishing Solly’s store and the front of his neighbours’ on either side of Monageng Market. The suppliers also filled provided all good for the trader by stocking the small store to capacity.

“We believe large retailers have a responsibility to support local small business development and in the 2015 financial year, we spent over R40 billion in supporting South African suppliers, with 94 per cent of our fresh-food products being procured from local suppliers. Our spend on SMMEs quadrupled in 2015 and expenditure on BBBEE businesses rose by over 39.2 per cent to R33 billion, with a focus on black-women owned businesses,” said Pick n Pay Deputy CE Richard van Rensburg in a statement.

According to the statement, Pick n Pay is committed to creating 5,000 jobs every year until 2020 or alternatively 20 jobs every working day. The retailer said it is currently investing 5 billion rand over the next two years in new store development and infrastructure.

In a ribbon cutting ceremony just as the sun came up, the local community came out to support the family showing just how integral the family is to the zone – the local high school choir performed, Solly’s niece made a cake showing the members of the family and neighbouring businesses catered the event.

Below is a list of what the Pick n Pay-GDED partnership includes:

•             Extensive range of branded products and very competitive purchase pricing

•             Efficient systems for ordering and managing stock

•             Increasingly centralised, regular and timely distribution network

•             Retail services including data, airtime and ticketing

•             Participation in Smart Shopper – South Africa’s no.1 loyalty scheme

•             Marketing and operational advice.

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