Independent retailing represents an alternative model of entry for small players as opposed to the traditional supermarket chain model. Independent retailers on the other hand, have successfully entered the retail market through the use of buying groups. It has grown to be an effective competitor in the retail industry, entering originally as a part-line retailer focused primarily on fruits and vegetables. High levels of concentration in grocery retail potentially limit gains to consumers instead resulting in high prices, poor quality or limited choice.įruit and Veg City has achieved tremendous growth since its inception in 1994 with over 100 stores to date.
2 These supermarket chains have a wide geographical presence in all provinces of the country accumulated over several decades. The supermarket industry in South Africa remains concentrated, with four large supermarket chains Shoprite, Pick n Pay, SPAR and Woolworths holding the largest shares of the grocery retail market.
1 The study is part of a programme of work to understand Barriers to Entry in the South African economy, supported by National Treasury. This article draws insights from the study of Fruit and Veg City Ltd (FVC), as a successful entrant into the formal grocery retail market, and further considers the growth of independent retailers.
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