Distribution Networks in South Africa
Types of Outlet
- Supermarkets or hypermarkets
- Located in suburban shopping centres the hypermarkets have effectued the traditional distribution chain by purchasing directly from manufacturers and bypassing the wholesaler.
- Retails chain Stores
- Groceries, clothing, toiletries, household goods
- Specialty stores
- Handling a single product line such as clothing, electronics, or furniture.
- Neighbourhood convenience stores
Evolution of the Retail Sector
- Growth and Regulation
- A major phenomenon in evolution of the distribution sector in South Africa has been the emergence of supermarkets or hypermarkets, which sell large quantities of almost all consumer goods on a self-serve basis. The hypermarkets, located in suburban shopping centers, have disrupted the traditional distribution chain by purchasing directly from manufacturers and bypassing the wholesaler, with low margins achieving high turnover, thereby placing price pressure on all competing outlets.
- Market Shares
- Though there is growing black middle class with considerable disposable incomes, there are still huge differences in income in South Africa with 20% of households accounting for 60%. The big South African consumer market splits in two parts: a market of white people & some newly affluent back people with a high purchasing power, and a market of large majority of black people still with a very limited purchasing power. The majority of the retail sale is carried out by shopping centres, groupments of small shops, big department stores (Stuttafords, Edgars, Woolworths), supermarkets (Checkers, Pick' n Pay) and hypermarkets (Hyperama and Makro). The traditional business remains developed, especially outside the conglomerations, but does not represent a big market share, as it is almost exclusively meant for poor population.
- Organizations in the Retail Sector
Fuel Retailers' Association
South African Council of Shopping Centres
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