The Daily Dispatch E-Edition

Township residents shop closer to home

Brand loyalty out the window as online deliveries catch on and consumers opt for smaller quantities at spaza shops

KATHARINE CHILD

Township consumers are increasingly prioritising value over brand loyalty, with almost two-thirds considering prices before anything else when buying a product.

This is according to an annual digital township consumer report, which polled more than 1,000 township residents.

The report, compiled by Rogerwilco, a digital marketing agency based in SA, in conjunction with research company Survey54, showed how cash-strapped consumers are spending their money in these tough times — increasingly shopping closer to home and buying smaller quantities.

The largely cash-based informal economy is poorly understood but there is growing interest among businesses in understanding what consumers want.

According to the report, about 25% of respondents reported spending more than 50% of their income within their township. About 23% said they spend 25% to 50% of their income there.

The finding that consumers are opting for value above brand is bad news for companies such as Tiger Brands, which sells more expensive branded goods including Koo, Oros, All Gold, Tastic, Black Cat, Jungle Oats and Mrs Balls.

Tiger Brands recently said it also found that consumers are opting for much cheaper products over premium branded goods.

Many spaza shops repackage goods such as sugar, rice and maize meal into smaller, cheaper sizes in clear plastic bags. This makes branding far less important than price since cashstrapped consumers are on the lookout for bargains.

About 55% of respondents said they bought smaller products repackaged at spaza shops.

Mongezi Mtati, senior brand strategist at Rogerwilco, said: “We’re seeing spaza shops adopting strategies such as repackaging and offering weigh-and-pay options. These approaches cater to customers’ budgets and their current need for value.”

In line with what Blue Ribbon and Iwisa maize producer Premier has reported, spaza shops are growing in popularity as people prefer to shop closer to home due to the high cost of a taxi fares.

The survey found an increase in spaza shop visits with 51% of respondents saying they shop at spaza stores daily, up from 44% in 2022.

Consumers were less likely to shop at supermarkets as often, with 18% doing so only once a month when accessing grants. Half of respondents shopped at a supermarket once a week.

Shoprite CEO Pieter Engelbrecht has said before that his company maintains high supply levels and avoids stockouts because consumers cannot afford to make frequent trips to a store and prefer to find everything they need in one trip.

Stephan Eyeson, CEO of Survey54, said shopper data reflects more frequent visits to spazas for items that don’t require refrigeration. This is because of increased load-shedding.

Oceana, the owner of Lucky Star brands, reported in its halfyear results that its canned fish brands have gained popularity because they don’t require refrigeration and are precooked so they can be eaten during load-shedding.

The report also found township deliveries growing — ranging from Sixty60 and Uber Eats to local delivery services run by township residents.

When asked about their topof-mind delivery services, 20% of respondents mentioned Checkers’ Sixty60 grocery delivery, followed by Pick n Pay’s delivery services at 10%.

Many customers and businesses place orders through Whatsapp from township delivery services.

Yebo Fresh, a grocery delivery service that was started in Khayelitsha and delivers vegetables and fruit to individuals, spazas and community organisations, benefits from its bulk buying power. It also has many orders placed through Whatsapp. Not only are Whatsapp data bundles cheaper, the service allows consumers to share their location for easy delivery.

The report found that digital access is also reshaping the traditional stokvel landscape, with significant increases in membership among the 18-24 and 25-34 age groups.

Two-thirds of individuals in the 25-34 age group are now part of one stokvel or more, making this the most prominent demographic.

They account for the highest growth in stokvel adoption. The 18-24 age group has shown an increase in stokvel participation, rising from 37% in the previous year to 44% in 2023. — With Lynette Dicey

Many spaza shops repackage goods such as sugar, rice and maize meal into smaller, cheaper sizes in clear plastic bags. This makes branding far less important than price

Business

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2023-06-09T07:00:00.0000000Z

2023-06-09T07:00:00.0000000Z

https://dispatch.pressreader.com/article/282183655451719

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