Copyright ©2024 | SME South Africa | Designed and Developed by Adclickafrica
Copyright ©2024 | SME South Africa | Designed and Developed by Adclickafrica
Updated on Nov 29, 2024
Spaza shops are one of the cornerstones of the South African informal economy. Characterised by its tuck-shop-like appearance on the corners of busy streets, these convenience stores sell basic goods like produce, drinks, cigarettes, and bread. They mostly cater to the black and low-income markets. Generally, you will find these businesses in townships, although they have branched out further than these geographical areas.
In recent years, the informal economy has grabbed the attention of JSE-listed companies such as Shoprite and Tiger Brands, and the key function it has in the South African economy has been taken more seriously than before. Estimated at R 184 billion, there is a serious need to develop this sector and improve support for these traders.
However, many of these shops have come under fire after a series of unexplained child mortalities after eating snacks sold at spaza shops. Questions about the health and safety of these businesses, the traceability of products and the compliance of owners are raised and the answers are concerning.
Yet, entrepreneurs who want to be successful in this sector can align with the requirements set up by the government and comply with vital health and safety practices.
Millions of South Africans rely on the township economy as a source of income and fulfilling their basic needs with low-cost goods.
Investec previously reported that this sector employs around 17% of the country’s total employment. Updated data calculated that 3,18 million people are employed in the informal sector, creating jobs for a vast amount of citizens.
Informal trading provides a means of income for marginalised individuals like women and youth. When people fail to obtain formal jobs, they turn to this sector to create a livelihood.
When it comes to spaza shops, the 2021 South African Township Marketing Report by RogerWilco indicated that they contribute 5,2% to the country’s GDP. In fact, it was calculated that the average spaza shop can easily generate R 2 million a year.
Informal trade in South Africa consists of various role players. From local food manufacturers to traders such as shop owners, food trucks, and street vendors. Furthermore, 40% of food consumers rely on informal traders for meals and snacks every year.
Looking at stores alone, approximately 11,1 million South Africans rely on spaza shops for their groceries because of the low prices and convenience of where shops are situated. Due to its popularity, this sector has drawn the attention of large brands who are aiming to move in and compete with the owner-managed shops.
One of the biggest challenges that spaza shops face is that bigger brands move in to take away business that historically only local shopkeepers were able to tap into. This competition has increased due to the call for stricter regulation which will mean that these shops align with the health and safety regulations that retail chains follow.
The implication is that formal retailers use the public trust in their brand to grow their footprints in townships and informal economies. Shoprite, for instance, has effectively leveraged its Usave offering to target the lower-income market. It provides competitive pricing and solves some of the issues that retailers face in the township concerning landlords.
Additionally, big brand BevCo has set its sites on spaza shops, aiming to have 30% of their products in stores by the end of 2027.
Spaza shops also face security and theft issues. This is a by-product of them being located in informal settlements which have extremely high crime rates.
Shops are a popular target for perpetrators because they are cash-based businesses. What makes them even more dangerous is that these shops are usually a backroom on someone’s property, or to the side of their houses.
Some of the suggested ways to improve security for spaza shops are to install security cameras and build stronger relationships with law enforcement.
Another challenge that spaza shops face is their supply chain. Some brands don’t supply goods directly to their customers in the townships, meaning that shopkeepers need to rely on alternative ways of obtaining goods – essentially buying goods from bulk retailers themselves. This might be a great option in theory, but logistical issues such as transportation to and back from the shop make these impractical. Unless the owner has their own vehicle, they are forced to use public transport.
The need to balance the costs of goods to make it affordable for customers with the cost of obtaining goods gives added complexity to this supply chain challenge.
Other challenges include restricted access to seed capital, inability to benefit from bulk purchases, competition from non-South African shops, lack of business information, unsuitable business location, and the lack of collateral.
South Africa has over 150 thousand informal retailers. These spaza shops are situated near many people’s homes and thus form an integral part of the community. Its offering of typical household goods and other necessities has positioned the spaza shop as a true convenience store in the full sense of the word. This proximity and accessibility to items such as snacks, beverages, airtime and electricity make stores convenient for residents who can quickly walk to the shop and obtain whatever they need.
Many shop owners go as far as to tailor the variety of goods in their stores to serve their communities by meeting their specific needs.
Rooted in its historical background as a hidden staple of township life (The term “spaza” originates from the isiZulu word meaning “hidden” or “informal”, hinting at the fact that these stores are unregulated), these stores are unique to South Africa’s culture.
The stores serve as a social hub within communities as they create a central place for gathering with neighbours while conversing and exchanging news. It has been noted that this creates a sense of camaraderie that fosters a strong sense of belonging and solidarity among residents.
Because spaza shops provide essential goods, they often serve as a lifeline during times of crises such as a natural disaster and political unrest. Yet, during the COVID-19 pandemic, the vulnerability of this sector was exposed. Where spaza shops could act as community support systems due to their agility and responsiveness to market needs, the informal sector was among the long list of trade that needed to stop. The implication was dire, affecting the livelihoods of many owners and workers.
Since spaza shops are built for locals by locals, they are a good example of how a community can assist itself and generate a lucrative local economy. Furthermore, in an attempt to keep prices low, spaza shops obtain inventory from local suppliers that produce a variety of goods like snacks, cereals and many more.
Recently, food safety standards in spaza shops came under fire for their health and safety procedures due to a number of children across the country dying after consuming snacks obtained from spaza shops.
In reaction to this, President Cyril Ramaphosa called for all spaza shops and food-handling facilities to register and sure that they comply with the basic requirements for trade licenses. The hope is that this will help protect citizens from food-borne illnesses and hazardous materials contaminating food. The government has given these facilities 21 days to register (15 November to 13 December 2024) after which non-compliant facilities will be closed down.
The following important information was communicated by the government:
Furthermore, the applicant must provide an affidavit stating that they are not engaged in the trade of illegal goods, as defined in this by-law and that their business will operate according to the applicable norms and standards.
After this, the municipality may conduct background checks on applicants, in collaboration with law enforcement agencies, to verify the legality of their business activities.
Successful applicants will receive their registration after this.
Proper food storage techniques save lives. The simple reason for this is that storing food at the correct temperature, in the correct container and handling it safely prevents food from spoiling or getting contaminated with bacteria that can lead to food poisoning. Therefore, you need to pay attention to the proper storage of perishable items in spaza shops.
Some techniques to follow include:
Temperature: Temperature is important to keep your food from spoiling. It prevents harmful bacteria from growing and helps food stay fresh for longer. Businesses that operate in the cold chain understand how to manage these temperatures well.
Should you have temperature-sensitive food, be sure to have enough working temperature-controlled storage.
Toxic Chemicals: If you handle food, you need to ensure that hazardous materials such as cleaning products are safely stored and will never come in contact with your products.
Storage Space: Different materials require different storage conditions. All spaces must be sanitary and free from pests and bacteria. Do not place boxes of food on the ground. This is extremely important because the floor is a source of bacteria.
First In, First Out: Use the First In, First Out (FIFO) system. This ensures both food quality and food safety. The FIFO method ensures that when an establishment gets a new food delivery, the new delivery will be stored behind the older deliveries. This method ensures that the older food will be used first.
Take care to also inspect packages. Don’t only look at the expiry dates, but also note if any of the packaging is damaged or has signs of pest infestation.
Labelling: Food needs to be labelled accurately, containing the name of the product, the date of preparation, the ingredients and the date of expiration.
Meat Goes Under: Meat must be stored under other food items to prevent the meat juices dripping onto other food items.
Handling and selling perishable goods in the correct manner is vital. These products deteriorate over time and become contaminated by living microorganisms such as fungi and bacteria – just think of your mouldy bread that started growing because you left it on the counter for too long.
Under this category, other products such as flowers, and certain pharmaceutical and chemical materials are found. These are sensitive to temperature, humidity, light and atmospheric pressure to which they’re exposed during their transport, storage and commercialisation.
Semi-perishable goods take longer to deteriorate, but at the core of it, it is still food which means it goes off.
Shop owners can obtain training that provides insight into how to safely prepare, manufacture and handle food. This is particularly helpful for traders and spaza shops that also provide meals.
The FoodBev SETA provides accredited food safety training that aligns with the R638 regulation. This course introduces the fundamentals of Food Safety practices, GMP and personal safety and well-being in South Africa.
Entecom has a comprehensive e-learning video-based SAATCA-accredited skills programme aimed at the R638. It covers the application of food safety practices and hygiene in a food-handling environment.
Regulation 638 of 2018 is a comprehensive legal framework in South Africa that established high standards of food safety and hygiene. It aims to protect public health, ensure compliance, enhance traceability and strengthen the reputation of the food industry.
It addresses the following issues:
1. Design of Food Preparation Areas
The design of the space where the food will be prepared needs to encourage good food hygiene practices. Floors should consist of easy-to-clean materials that are safe to walk on. Walls should also be durable, washable, nontoxic and easy to clean. Ceilings and overhead fittings should discourage dust, dirt or mould accumulation. Windows (with the exception of serving windows), must not accumulate dirt and must have insect screens.
2. Water Supply
Water that is an ingredient or comes into contact with food for cleaning, heating, steaming, and cooling must be of drinking quality. The same is true for ice, and it must be produced, handled and stored hygienically.
Water for non-food purposes, such as fire control, heating, and refrigeration, must be kept in isolated systems to prevent contamination.
3. Equipment
All equipment that is used to prepare food must be in good condition, unbroken and clean.
4. Staff Hygiene
Anyone handling food or working in the area must practice good hygiene.
5. Food Waste
Food waste must be removed from the food preparation area as soon as possible and stored in containers that are suitable for waste disposal services to handle.
6. Pest Control
Owners must exercise adequate measures to prevent pests from contaminating food both in storage and preparation. This means protective storage of ingredients, fly screens and cleaning spills that can attract pests.
Pest control and prevention is a vital part of protecting consumers against foodborne illness.
Hygiene practices are key to protecting customers at your spaza shop. General hygiene is a great starting point to keep your store in operation. These general practices include shop cleaning protocols, staff hygiene training and waste management solutions.
When it comes to shop cleaning protocols, every spaza shop should have the following procedures in place.
Emergency Cleaning Protocols: Procedures for accidents such as spills, breakages, or sudden messes should promptly and efficiently respond to these situations. This may include having cleaning kits readily available throughout the store and training staff on how to deal with these.
Regular Cleaning Schedules: Comprehensive cleaning should occur on a regular basis to clean floors, walls, fixtures, and fittings.
Touchpoint Sanitation: These are high-touch surfaces such as baskets, door handles, and payment terminals and they require frequent decontamination.
Appropriate Cleaning Tools: Use the right tools for every job to make cleaning easy and effective.
Additional steps that can be taken to ensure food safety are to have a range of processes and steps in place. These include colour-coding systems, four-step cleaning processes like washing, rinsing, drying, and disinfecting, and regular inspection and maintenance.
Furthermore, with proper training, wearing personal protective equipment and exercising good waste management practices, food safety can immediately be improved.
Staff Hygiene Training
Staff hygiene training for spaza businesses is vital. It’s not enough for only owners to understand how to safely work with food. Everyone who will touch food needs to work safely with it. Provide the opportunity for everyone working with you to also obtain knowledge on food safety training
Personal Protective Equipment (PPE)
Using personal protective equipment is an effective way to enhance the safety of food in your business. Whether processing or packaging food, wear gloves, hair nets and masks to keep any germs from spreading to the food.
Waste Management Practices
Affordable waste management for spaza shops should follow waste disposal regulations.
According to the Waste Classification and Management Regulations, food scraps or rubbish generated by spaza shops are classified as general waste. It goes on to explain that it is the responsibility of the generator of waste to ensure that waste is reused, recycled or disposed of. You should clearly mark where waste is placed in your facility (your dustbin, for example), and work with waste management to ensure that it is removed.
Because service delivery for waste removal in townships is poor, this is a challenge for spaza shops. How do you practice waste management without a waste manager? That’s why it’s extra important to ensure that it is removed from your premises.
Rubbish removal will also help reduce your risk of rodent infestation.
Pest Control
Rodents, cockroaches, ants, and flies are attracted to food sources. If your shop stocks food, then you are at risk of attracting pests. Pest control prevents these unwanted creatures from contaminating your stock.
Keep an eye out for early signs such as droppings or gnaw marks, and use safe methods to eliminate any possible pests.
Be careful when using chemical pest control
Sometimes, chemical intervention is the only thing that helps get an infestation under control. But you need to rely on a trained specialist to help you. This is because chemicals can be extremely dangerous. Household pesticides, for instance, can lead to accidental food contamination. When it ends up in food products, customers can have serious health issues such as allergic reactions and food poisoning, leading to illness or even death.
That is why submitting a food license application before running your shop is so vital.
Additional problems that can be caused by hazardous chemicals include respiratory problems and skin irritation.
If the wrong or improperly handled chemicals are used, you can violate food safety regulations, leading to fines or even closure of your shop.
Based on the most recent developments surrounding spaza shops, citizens are encouraged to report illegal business practices. Municipalities can advise residents of a complaints procedure through which to report illegal business practices. This complaints procedure will also include details about the appeals process for the application process.
According to the Immigration Act of 2002, it is a criminal offence to assist or enable an illegal foreigner to conduct any business in the Republic of South Africa.
It is also a criminal offence to assist an illegal foreigner in obtaining a licence for them to conduct any business.
To ensure you comply with all the requirements, find out more in our Guide to Launching a Spaza Shop. You can also download the Spaza Shop Stock List to help you keep track of new and old inventory.
Copyright ©2024 | SME South Africa | Designed and Developed by Adclickafrica
Copyright ©2024 | SME South Africa | Designed and Developed by Adclickafrica