Spaza (South Africa)

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Spaza
Location: South Africa
SouthAfrica map.png
Author: Vanya Gastrow
Affiliation: African Centre for Migration & Society, University of the Witwatersrand

Original Text: Prof. Vanya Gastrow

In South Africa, a spaza shop is a small informal grocery shop operated from residential premises in townships.

The term spaza lacks clear etymological roots (Spiegel 2005: 192[1]). One view is that it originates from the Zulu word isiphazamiso or Xhosa word isiphazamisa, both meaning something that causes a disturbance or hindrance (Spiegel: 195[2]). This interpretation supports the common belief that spaza shops first emerged during boycotts of white businesses in South Africa in the late 1970s and garnered the name spaza because they were seen as enabling the disturbance of apartheid and white-dominated institutions. Yet, as early as the 1960s spaza was also understood to mean cheap, fake and imitation, or to tease and fool around (Spiegel: 196-197, 202[3]) indicating several different and contrasting etymological roots.

Today the term spaza shop (or just spaza) is used throughout South Africa to refer to informal grocery shops operated from houses in townships (i.e. areas formerly classified as ‘black’ by the apartheid government). These shops supply basic household items such as food, soft drinks and toiletries to nearby residents. Spaza shops are located in large cities as well as in small rural towns across the country, and vary in size and form. Traders operate shops from converted garages, shipping containers placed in front yards, corrugated iron structures attached to houses, and from houses themselves. Some shops comprise small rooms where shopkeepers serve customers through a window, while other shops resemble small supermarkets where customers can walk in and select goods.

Spaza shops are considered informal as they tend not to be registered with state authorities. This does not necessarily mean that shops operate illegally. While legal frameworks differ from municipality to municipality, generally very few laws regulate spaza shops. For instance, until recently there was no requirement for businesses earning below the tax threshold to register with South Africa’s revenue service (Charalambou 2010[4]). Not all municipalities require spaza shops to possess trading licenses or permits. While a number spaza shops trade in illicit cigarettes, most of their goods are legal items purchased from formal wholesalers. Furthermore, many township zoning schemes permit the operation of businesses from residential properties on condition that the dominant use of the property remains residential and the business does not create any nuisance. These lenient regulatory frameworks have meant that spaza shops are relatively easy to set up and operate. Yet at the same time they have resulted in state authorities possessing very little information about or control over spaza shop activities.

In recent years South African spaza shopkeepers have faced increasing business competition from large formal supermarket chains, as well as spaza shops that are operated by foreign migrants originating from countries such as Somalia, Ethiopia, Pakistan, Burundi and China. Large supermarket chains were historically based in distant central business districts, and were not easily accessible for township consumers. This benefited spaza shopkeepers, whose businesses were located closer to where township residents lived. However, over the past few years supermarket chains have increasingly penetrated township grocery markets, offering low prices and wide product ranges within closer reach of where township residents live. This poses a challenge to smaller spaza shops, many of which can no longer rely solely on geographical convenience to remain competitive.

Photograph showing a small informal grocery shop operated from residential premises in townships. This small informal grocery shops are called spaza shops. Artist: Vanya Gastrow

Foreign migrant traders began to enter the spaza market from the mid-1990s. While some foreign migrants reside illegally in the country, others are documented asylum seekers or refugees and are thus entitled to work in South Africa. They access township premises by renting shops from South African landlords, who were often previously spaza shopkeepers themselves. Foreign migrant spaza shopkeepers characteristically sleep on beds or mattresses in their shops, or in rooms behind their shops to save income on rent as well as to guard their shop’s contents. Their arrival has introduced new competitive trading practices into the spaza market. For example, foreign migrant spaza shopkeepers invest great efforts in sourcing low prices for their goods, place low mark ups on them, and offer enhanced customer services (such as credit, longer operating hours, bulk ‘hampers’ sold at discounted prices, and flexible quantities such as small pouches of sugar or single eggs) (Gastrow with Amit 2013: 26[5]). They also collaborate by sharing transport costs, and jointly investing in new shops. These competitive practices contrast with those of many South African spaza shops, which tend to be more ‘survivalist’ than opportunity driven (Charman et al 2012[6]).

Increased supermarket and foreign migrant spaza shop competition in townships has seen a corresponding decline in South African spaza shops (Charman et al 2012[7]). This phenomenon has had widespread political, social and economic implications for the country. In particular it has ignited anger amongst many South African spaza shopkeepers who resent having to compete against foreign nationals and allege that they engage in unlawful activities and unfair trading practices. These hostilities have often spilt over into violence, with some foreign migrant spaza shopkeepers falling victim to orchestrated murders and arson attacks (Gastrow with Amit 2012: 35[8]). Many township residents also view foreign migrant spaza shopkeepers as depriving them of economic opportunities, and have engaged in frequent xenophobic lootings of foreign migrant shops, as occurred in Soweto in January 2015 (Essa 2015[9]).

These attacks have garnered extensive negative publicity for South Africa, which since 1994 has enjoyed a worldwide reputation for combating discrimination and embracing diversity. In response to violence and political lobbying by South African shopkeepers, the South African government has generated new policy proposals aimed at regulating foreign migrant spaza businesses. These include considering placing limits on the ability of foreign nationals to trade (Department of Trade and Industry 2013(a): 20-21[10]), and requiring all businesses in the country to register with local authorities (Department of Trade and Industry 2013(b)[11]). In June 2015 South Africa’s Competition Commission launched an enquiry into the business practices of foreign migrant spaza shops in South Africa (Competition Commission 2015[12]) to assess their impact on South Africa’s grocery sector.

There is still much to learn about the scale and nature of the spaza market in South Africa. Research methods used thus far include locational mapping (Charman et al 2012[13]), surveys (Hikam 2011[14]) and qualitative interviews (Gastrow with Amit 2013[15]). Challenges faced in measuring the market include the lack of official data, the frequent relocation of foreign migrant spaza shopkeepers, the context of fear and violence, as well as privacy concerns relating to the disclosure of personal income levels and shops’ legal compliance. Because spaza shops vary in size, ownership and business methods, attempts to measure their activities should ideally combine qualitative and quantitative approaches.

In endeavoring to resolve conflict in the spaza market, state authorities have had to try and balance diverse and conflicting concerns. These include the interests of South African consumers and landlords, the country’s obligations towards asylum seekers and refugees, the economic interests of South African spaza retailers, and popular fears over restricted economic opportunities. The lack of detailed information about the market makes the resolution of competing interests in the spaza market more difficult. It also hinders the state’s ability to collect tax and ensure compliance with health and safety standards. At the same time, low levels of state regulation enable traders with relatively little education and financial resources to set up businesses for themselves, and also contributes to the spread of ownership and competition in South Africa’s grocery sector.

Notes

  1. Spiegel, A. 2005. ‘Refracting an Elusive South African Urban Citizenship: Problems with tracking spaza’, in S. L. Robins (ed.), Limits to Liberation After Apartheid: Citizenship, Governance & Culture. Oxford: James Currey: 190-205.
  2. Spiegel, A. 2005. ‘Refracting an Elusive South African Urban Citizenship: Problems with tracking spaza’, in S. L. Robins (ed.), Limits to Liberation After Apartheid: Citizenship, Governance & Culture. Oxford: James Currey: 190-205.
  3. Spiegel, A. 2005. ‘Refracting an Elusive South African Urban Citizenship: Problems with tracking spaza’, in S. L. Robins (ed.), Limits to Liberation After Apartheid: Citizenship, Governance & Culture. Oxford: James Currey: 190-205.
  4. Charalambou, L. 2010. ‘South Africa Acts Against Tax Evasion’, Tax News, 14 May, http://www.tax-news.com/news/South_Africa_Acts_Against_Tax_Evasion____43265.html.
  5. Gastrow, V. and Amit, R. 2013. ‘Somalinomics: A Case Study on the Economic Dimensions of Somali Informal Trade in the Western Cape’, African Centre for Migration & Society report, http://www.migration.org.za/uploads/docs/report-42.pdf.
  6. Charman, A., Petersen, L. and Piper, L. 2012. ‘From Local Survivalism to Foreign Entrepreneurship: The Transformation of the Spaza Sector in Delft, Cape Town’, Transformation, 78: 47-73.
  7. Charman, A., Petersen, L. and Piper, L. 2012. ‘From Local Survivalism to Foreign Entrepreneurship: The Transformation of the Spaza Sector in Delft, Cape Town’, Transformation, 78: 47-73.
  8. Gastrow, V. and Amit, R. 2012. ‘Elusive Justice: Somali traders Access to Formal and Informal Justice Mechanisms in the Western Cape’, African Centre for Migration & Society report, http://www.migration.org.za/uploads/docs/report-38.pdf.
  9. Essa, A. 2015. ‘South Africa's Soweto tense after 'xenophobic' attacks’, Aljazeera News, 23 January,http://www.aljazeera.com/news/africa/2015/01/south-africa-soweto-tense-xenophobic-attacks-150123044841532.html.
  10. Department of Trade and Industry. 2013(a). National Informal Business Development Strategy (NIBDS).
  11. Department of Trade and Industry. 2013(b). Licensing of Businesses Bill. General Notice 231 of 2013, http://www.gov.za/sites/www.gov.za/files/36265_gen231.pdf.
  12. Competition Commission. 2015. Terms of Reference: Grocery Sector Retail Market Inquiry. General Notice 580 of 2015, http://www.gov.za/sites/www.gov.za/files/38863_gen580.pdf.
  13. Charman, A., Petersen, L. and Piper, L. 2012. ‘From Local Survivalism to Foreign Entrepreneurship: The Transformation of the Spaza Sector in Delft, Cape Town’, Transformation, 78: 47-73.
  14. Hikam, A. S. M. 2011. ‘An Exploratory Study on the Somali Immigrants’ Involvement in the Informal Economy of Nelson Mandela Bay’, Masters dissertation, Nelson Mandela Metropolitan University, http://dspace.nmmu.ac.za:8080/jspui/bitstream/10948/1315/1/ABDU%20SH%20MOHAMED%20HIKAM.pdf.
  15. Gastrow, V. and Amit, R. 2013. ‘Somalinomics: A Case Study on the Economic Dimensions of Somali Informal Trade in the Western Cape’, African Centre for Migration & Society report, http://www.migration.org.za/uploads/docs/report-42.pdf.