Factors affecting growth and profitability of spaza shops in Ekurhuleni Metropolitan Municipality

Abstract

The study aimed to understand the factors affecting the growth and profitability of spaza shops in the Ekurhuleni Metropolitan Municipality (EMM). A qualitative, explorative approach was undertaken in the four selected locations of the East Rand Region of the EMM, namely Kwa-Thema, Tsakane, Daveyton and Duduza. Fifteen interviews were conducted using an online WhatsApp voice note communication methods during the Covid-19 lockdown period. The main findings were that the pricing of the products, not having enough stock, credit facilities offered to customers and competition from foreign national. A lack of attention to the factors leads to the continuous closure of South African-owned spaza shops. Any intervention to sustain the growth and profitability of spaza shop should include strategic pricing of products, keeping spaza shops fully stocked with variety of products that appeals to the customers, identifying prospective suppliers, not offering credit, attending business trainings, providing excellent customer service, and building a close working relationship between South African-owned spaza shops and foreign national-owned spaza shops.