The spread and internationalisation of South African retail chains and the implications of market power
Reena Das Nair
International Review of Applied Economics, 2019, vol. 33, issue 1, 30-50
The retail space has seen significant changes in post-apartheid business. Spurred by the end of apartheid urban laws, rising urbanisation and increased per capita income, large South African retailers, especially supermarkets, have increased their footprint, diversified their formats and started targeting low-income segments of the population. The large chains have made substantial investments in distribution and procurement systems and in retail space in shopping malls to realise economies of scale and scope. They have also grown in southern Africa, shaping markets across countries.This paper assesses the drivers of these changes and the extent to which substantial market power in retail lies with the main groups. It evaluates the ways in which market power has been exerted and the impact supermarket growth has had on the competitive landscape including on independent rivals. The implications on suppliers, as supermarkets are increasingly important routes to market for processed food and household consumable products, are evaluated, in addition to the impact of buyer power. The paper explores the implications for regulation, competition policy and industrial policy.
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Persistent link: https://EconPapers.repec.org/RePEc:taf:irapec:v:33:y:2019:i:1:p:30-50
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