03:17 am
23 October 2016

SA Brands Dominate African Retail But 90% Shop At Informal Traders

South African brands dominate the formal African retail landscape, but around 90 percent of Africa’s population still shops at informal markets, supporting informal traders rather than formal shopping centers, according to IndependentOnline.

Deloitte released its inaugural African Powers of Retailing 2015 report Tuesday, which shows South African retailers in the top 10 positions out of 25 top retailers in Africa.

Of the top 25 African retailers in 21 countries, 10 now come from countries outside South Africa, including three from Zimbabwe, two from Botswana and one each from Kenya, Morocco, Tunisia, Nigeria and Zambia.

Botswana’s Choppies is the fastest growing retailer of the top 25 African retailers of 2015, with a 24.4-percent year-on-year growth for fiscal year 2013.

Shoprite was named No. 1 retailer in Africa, followed by Massmart and Pick n Pay, with Spar in fourth place and Woolworths coming in at No. 5.

Of the top 25 listed retailers, 36 percent are involved in food and beverage retailing, and 24 percent in clothing and accessories.

“The more mature South African retail market has performed strongly from a continental perspective, which is one of the reasons international retailers eager to establish a footprint on the African continent have tended to enter via South Africa,” said Dylan Piatti, Deloitte’s chief of staff for consumer business in Africa.

The potential for formal retail expansion is impressive.

About 90 percent of transactions in the African retail market still occur through informal channels, according to the U.N. Economic Commission for Africa, IOL reports. It’s even higher in West African markets such as Ghana, Nigeria and Cameroon — 96-98 percent.

This compares to 40 percent in South Africa — the continent’s most mature retail market.

Informal retail, aka “the second economy,” is considered a crucial supply channel of goods in densely populated areas in the South African retail sector, BizCommunity reports. Informal retail outlets include taverns,  tuck shops (small food-selling retailers). and spazas or small retail stores. Spazas are making huge inroads in the local retail arena.