As foreign-owned spaza shops shut across KwaZulu-Natal, Gauteng and the Western Cape following weeks of anti-immigrant protests, many township residents expected little more than a change in ownership.
Instead, they found themselves paying more for everyday essentials – with the price of bread rising from about R16 to as much as R30 in some areas, according to the Africa Diaspora Forum (ADF).
The government’s response has been swift: a R500 million Spaza Shop Support Fund, launched in April 2025, offering point-of-sale (POS) devices, inventory management tools, digital payment systems and business training to South African-owned township retailers.
But while digital tools are rolling out, a deeper structural problem is emerging: many locally owned spaza shops still lack reliable, affordable access to stock – a gap that foreign-owned shops filled through informal, community-based logistics networks now disrupted by closures.
The hidden cost of “going digital”
Seventy-eight spaza shop owners in Ndwedwe Local Municipality, KwaZulu-Natal, are among the first beneficiaries of the fund, receiving POS devices, grant funding of up to R40,000 and compliance training through the Small Enterprise Development Finance Agency (SEDFA).
The devices allow them to accept card payments, offer cash withdrawal services and automatically record sales. This creates a digital transaction history that lenders can use to assess creditworthiness.
Small Business Development Minister Stella Ndabeni-Abrahams has emphasised that these tools can improve stock management, reduce losses and strengthen access to finance.
Yet technology alone cannot solve the last-mile logistics bottleneck that has long defined township retail.
Unlike formal supermarkets, most spaza shops – especially those owned by South Africans – lack direct access to manufacturers or large distributors. They depend on local wholesalers, who often supply short-dated, lower-quality or overpriced goods.
Many cannot afford to buy in bulk, so they purchase stock in small quantities, driving up the cost per item. Others cannot afford delivery fees, forcing them to close their shops for several hours to travel and restock in person – resulting in lost sales and ongoing transport costs.
“Instead of focusing on growing their businesses, shop owners spend a significant amount of time just sourcing stock,” notes a July 2025 analysis of the fund’s supply chain challenges.
The informal networks that kept prices low
Foreign-owned spaza shops, by contrast, often tapped into established supplier networks and buying groups that enabled bulk purchasing, better pricing and reliable delivery – advantages built over years of informal cooperation.
Lincoln Mali, CEO of fintech company Lesaka Technologies, told TechCabal: “The disruption to those networks has left some locally owned retailers buying smaller quantities at higher prices, making it harder to offer competitive prices.”
The Africa Diaspora Forum estimates that hundreds of foreign-owned shops have closed in recent weeks, but there is no official tally.
What would actually move the needle?
Analysts and industry observers point to four interventions that could complement the government’s digital push:
– Support community-based logistics teams to strengthen last-mile delivery and reduce stockouts.
– Fund better-located warehousing and cold storage infrastructure to protect perishable goods and improve food safety.
– Build verified supplier networks to ensure reliable access to affordable and trusted products.
– Roll out technology like POS systems and digital inventory tools but pair them with delivery subsidies or group-buying schemes.
The Department of Trade, Industry and Competition (DTIC) and the National Empowerment Fund (NEF), which jointly administer the R500 million fund, have indicated that part of the support includes “initial purchase of stock via delivery channel partners.”
But critics argue that without addressing the time and cost of restocking, digital tools risk becoming another layer of complexity for shop owners already stretched thin.
A broader test for the R900 billion township economy
South Africa’s township economy – estimated at R900 billion ($53.6 billion) – now faces a critical question: Can locally owned spaza shops combine digital tools with affordable financing and efficient supply chains to remain competitive and keep essential goods affordable?
The answer may determine not just the survival of individual shops, but the resilience of an entire informal retail ecosystem that millions depend on for daily necessities.
Additional reporting from TechCabal, SAnews, Vutivi Business and the Department of Small Business Development.
