Spaza stores in local townships receive Tiger Brands ‘makeover’
The informal sector in South Africa is earmarked for significant growth by Tiger Brands and the company is making waves by having thousands of its products stocked in township spaza shops across the country.
Tiger Brands said on Tuesday, that its presence in the informal sector was gaining traction with its brands now available in more than 71 000 of a targeted 130 000 stores
The company’s expansion into South Africa’s local township economy is gaining swift traction a year after it began accelerating its route-to-market strategy to increase the presence of its products in this booming market.
In 2023, Tiger Brands announced its targeted route-to-market strategy to increase its brands’ presence in at least 130 000 stores in the general trade over the next five years, including spaza stores, mini-superettes, superettes, and min-and midi-wholesalers.
Since then, the company said, it had increased its presence and visibility in more than 71 000 stores, up from 50 000 at the end of 2023. It expects to reach 90 000 stores by the end of 2024 and is well on track to cover a total of 130 000 stores over a period of five years.
“As part of its expansion in the informal sector, Tiger Brands offers business solutions to mini- and midi-wholesalers and store owners, including spaza stores and superettes, to help grow the Tiger Brands share of the consumer basket in these outlets.
“According to findings by Trade Intelligence (2022), more than 70% of South African households purchase their grocery and other product requirements within the informal trade. It is a significant market contributing at least 26% or R184 billion of the total R716 billion South African Fast-Moving Consumer Goods sector. The informal market’s growth rate exceeds that of modern trade,” Tiger Brands said in a statement.
Township business is seen as a possible catalyst for the economy. The Township Economies conference and exhibition held at Emperors Palace Ekurhuleni heard earlier this week, that promoting the R900 billion township economies ecosystem would create jobs and grow the overall South African economy.
Luigi Ferrini, Chief Customer Officer, Tiger Brands, said, “We see significant opportunity to grow in the township market by offering consumers affordable quality products that are trusted, sought-after and meet the needs of consumers.”
Since the launch of its township route-to-market strategy, distribution and availability of Tiger Brands products in this market had increased by more than 90%.
Tiger Brands said that it was working with customers to create ‘Perfect Outlets’ through investments in point-of-sale marketing execution across the Tiger Brands product basket, as well as branded coolers in stores to improve cold availability of Tiger Brands’ ready-to-drink beverages.
Tiger Brands is not the only major company setting its sights on the township economy, as the Shoprite Group recently introduced an innovative digital solution for its Cash and Carry stores, marking the wholesale brand’s first venture into e-commerce.
This comes as the group upped its e-commerce game with the announcement in May that its Checkers Sixty60 was beta testing the new and improved version of its app, enabling customers to shop for more than 10 000 larger Hyper products, with same-day delivery scheduled within a 60-minute time slot.
Mark Cotton, Head of B2B eCommerce at the Shoprite Group, said spaza shops and smaller retail businesses often faced significant obstacles, including high transportation and fuel costs, and difficulties in meeting demand within the informal sector.
Meanwhile, Tiger Brands also branded spaza stores with bold murals serving as attractive township billboards, showcasing some of South Africa’s best-loved brands manufactured by the company, including ACE, Golden Cloud, Oros and KOO.
The multi-million-rand project forms part of Tiger Brands’ expansion drive into the local informal trade, a programme it accelerated in mid-2023.
The food producer said it aimed to brand a total of 2 000 spaza stores by 2029.
BUSINESS REPORT