Abstract
Spaza shops are an essential part of Local Economic Development (LED) in the townships. Small businesses like spaza shops have been known to play a pivotal role in reducing the triple burden of unemployment, poverty, and inequality in the township. These establishments are beneficial to townships as the residents there purchase at their nearest store, and thus do not incur travel costs. However, it has been claimed that locally owned spaza shops are challenged by the influx of immigrant owned spaza shops that result in intense competition. The fundamental aim and objective of this technical report is to investigate the factors that hinder the growth and development of locally owned spaza shops. The technical report applied the Local Economic Development (LED) theoretical framework to investigate and examine the challenges experienced by locally owned spaza shops in Mofolo, Soweto.
The technical report used a qualitative research method and administered surveys to local and immigrant spaza shop operators in Mofolo. To address the research questions which focus on the lived experiences of the participants, an interpretivist philosophy was applied, based on a qualitative approach. A thematic analysis was used to analyse the data. The findings of the technical report suggest that locally owned spaza shops are indeed challenged by immigrant-owned spaza shops, and that they face stiff competition, are exposed to crime, and do not network to buy stock so that they can offer competitive prices, hence their growth is restricted. It also emerges that the government is doing little to support locally owned spaza shops.
Key terms: Spaza shops, local owned spaza shops, immigrant-owned spaza shops, local economic development, competition, coopetition.