Retail Giants Trampling Small Black Businesses

South Africa’s big four grocery retailers are squeezing everyone else out of the market and making it impossible for independent businesses to survive, a Competition Commission inquiry has heard.

- Lloyd Gedye

As Mphuti Mphuti’s testimony before the Competition Commission’s Grocery Retail Inquiry drew to a close, he paused for a moment. “Just talk to Mr Whitey Basson, just talk some sense into him,” he said. “I’m serious.”

Mphuti is the chairperson of Soweto Business Access. Earlier in his testimony, he had contrasted the R100m remuneration package received by former Shoprite Holdings CEO Basson in the last fiscal year to the plight of small, black independent retailers, who are being squeezed out of the market by South Africa’s big four grocery retailers – Spar, Woolworths, Shoprite/Checkers and Pick n Pay/Boxer.

Mphuti maintains that big business is insensitive to the socio-economic conditions in townships, choosing to only focus on profit, and not on the communities within which they do business.

According to Mphuti, malls in South Africa, which are dominated by large, established retailers, are killing off small, independent black-owned businesses.

He said the retail mall space is dominated by stores of JSE-listed companies.

“The malls are biased towards big business,” said Mphuti. “The shopping malls are an extension of the big business agenda.”

If independent black retailers are allowed into a mall, they are given short-term leases which are more expensive than the long-term leases provided to big business, claimed Mphuti.

He said often the only justification given for 12- to 18-month lease periods is, “We don’t trust you,” and that this practice essentially amounts to “rent protection” for big business at the expense of small black businesses.