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Are rural retail developments benefitting rural inhabitants?

By: Temo Matjiya 2014-08-22 12:58

The South African groceries retail market is dominated by few national players such as Shoprite-Checkers, Picknpay, Spar to name but a few. There has not been adequate investigation regarding how these national retail developments benefit rural areas and townships for that matter as they have moved out of their traditional markets and are now infiltrating rural areas.

In the past, rural areas and townships used to be served by corner shops and spazas for convenience goods and services. During the post 1994 period, a number of internationalists such as Somalis, Ethiopians and to some extent Pakistanis have infiltrated this market. Currently you will not drive for 5km in a rural area or township without seeing the shops that were previously manned by South Africans being rented out by other nationals.

My next point is, not much emphasis has been placed to look at the impact of huge retails on the rural and township life. These food retailers do not bring jobs and/or industrialisation in these areas; they milk away all the financial resources in the communities because of their proximity to the settlements. The savings culture is also eroded because people travel shorter distances to spend their hard earned cash.

Black people generally are not able to participate in the ownership of these retailers because some of them are not franchising and they only rent space and pay per square meter. For rural areas this is very bad because it is even expensive for locals to develop these shopping malls at a cost of R15, 000 per square meter.

There is a need to urgent change the ownership of these retailers so that new entrants can be able to participate in the economy of the country. South Africans will not be able to get economic freedom if these practices continue.

There is also general injustice that land values in rural areas are undervalued whereas retailers still sell their products at the same prices that they do in urban areas and thereby gain more. The poor rural communities are told to rely on trusts set up by the developers where meagre amounts are deposited to benefit a lot of people.

I hope that someone is listening from Shoprite, Picknpay, Spar and other national retailers.

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