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Grocers finally cater to South Africa's urban poor

A Shoprite grocery store in Lusaka, Zambia. The chain is one of several moving into low-income urban areas in South Africa. (Simon Berry/flickr/cc)

Inequality runs deep in South Africa’s cities, as evidenced by the lack of supermarkets in poor neighborhoods. Grocers long targeted the wealthy, a tiny fraction of the population, leaving the masses to rely on street hawkers or lengthy taxi rides to buy food. Janice Kew reports for Bloomberg that several chains are finally entering low-income urban enclaves as they seek to expand market share.

For Choppies, Shoprite, Pick n Pay, Wal-Mart and others, the strategy is a calculated risk, the article says. Selling to South Africa’s poor means reaching a wider population, but also lower profit margins. The stores hope to profit through higher sales volume. Among the places to benefit is Rustenburg, a city near Johannesburg where mining strikes and layoffs have hit workers hard.

The move into impoverished areas is welcome news for slum dwellers barely making ends meet. About 25 percent of South Africans are unemployed, with the poorest half of the population representing less than 8 percent of total income, the article says. Roughly 65 percent of households earn less than 6000 rand a month, about US$384.

Source: 
Bloomberg

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