The role of South African supermarket chains in developing capabilities and driving greater intra-regional trade

The document argues that while the expansion of South African supermarket chains into the SADC region offers opportunities for local suppliers to enter regional value chains, this potential is currently hindered by high market concentration and the abuse of buyer power. It recommends the implementation of a regional code of conduct, the harmonisation of standards, and targeted supplier development programmes to reduce reliance on deep-sea imports and foster industrialisation in southern Africa.

• The expansion of supermarket chains into rural and peri-urban areas of the SADC region provides farmers, agro-processors, and light manufacturers with routes to market, allowing them to build scale and develop capabilities for producing value-added products.
• Despite the growth of retail networks, most supermarket products in the region are imported from South Africa or deep-sea sources, indicating a lack of intra-regional trade.
• High market concentration, where two or three South African chains dominate many formal markets, grants supermarkets significant buyer power to control pricing and impose various fees on suppliers.
• Suppliers face cumulative charges from supermarkets—including listing, support, advertising, and wastage fees—that can reduce the product price by 10-15%, straining their margins.
• Intra-regional trade is limited by non-harmonised standards; for example, products accredited by the Zambia Bureau of Standards are not recognised in South Africa.
• The document recommends a regional code of conduct to regulate supermarket behavior, citing Namibia's 2016 Retail Sector Charter as a model for supporting local SMEs through sourcing commitments and enterprise development.
• Barriers to retail competition in South Africa, such as exclusive leases in shopping malls, prevent the entry of independent retailers, suggesting a need for urban planning policies to ensure a diversity of retail formats.

APA

Das Nair, R. (2018). The role of South African supermarket chains in developing capabilities and driving greater intra-regional trade. Institute for Economic Justice. https://iej.org.za/wp-content/uploads/2020/07/Stream-1-Policy-Brief-7-The-role-of-South-African-supermarket-chains-in-developing-capabilities-and-driving-greater-intra-regional-trade.pdf

Chicago

Das Nair, Reena. The role of South African supermarket chains in developing capabilities and driving greater intra-regional trade. Institute for Economic Justice, 2018. https://iej.org.za/wp-content/uploads/2020/07/Stream-1-Policy-Brief-7-The-role-of-South-African-supermarket-chains-in-developing-capabilities-and-driving-greater-intra-regional-trade.pdf.

Wikipedia

{{cite report |last1=Das Nair |first1=Reena |title=The role of South African supermarket chains in developing capabilities and driving greater intra-regional trade |publisher=Institute for Economic Justice |date=August 2018 |url=https://iej.org.za/wp-content/uploads/2020/07/Stream-1-Policy-Brief-7-The-role-of-South-African-supermarket-chains-in-developing-capabilities-and-driving-greater-intra-regional-trade.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{dasnair2018role, author = {Das Nair, Reena}, title = {{The role of South African supermarket chains in developing capabilities and driving greater intra-regional trade}}, institution = {Institute for Economic Justice}, year = {2018}, month = aug, url = {https://iej.org.za/wp-content/uploads/2020/07/Stream-1-Policy-Brief-7-The-role-of-South-African-supermarket-chains-in-developing-capabilities-and-driving-greater-intra-regional-trade.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }