Critical success factors in liquor retailing in selected townships of Cape Town, South Africa

Abstract

Small Micro and Medium Enterprises (SMMEs) play a vital role in employment creation and economic growth. As South Africa experiences population growth, so does the township small business industry. Township refers to those areas that were previously reserved for Blacks, Coloured and Indians under the discriminatory apartheid government. The characteristics of these areas included the following: poor infrastructure, high crime, low income and generally exclusion from mainstream economic activities According to the top three liquor manufacturers and brand distributors that claim about 80% of the total market share by volume and revenue (South African Breweries, Distell and Brandhouse Beverages) the township market makes the largest contribution to their business revenue. These giants are recording growth every year, but the development, growth, sustainability and success of the township liquor retail market is static and unsatisfactory. How township liquor retailers can achieve sustainable growth is not yet clear. The significant contribution made by the industry to the economy and job creation has been recognised by industry role players at large. The Department of Trade and Industries (DTI) has also expressed its commitment to supporting this industry as one that shows potential for growth and sustainability. This particular sector needs assistance to improve the success and sustainability of township liquor retailing, especially with the creation of employment opportunities. The objective of this study, then, is to develop an industry specific framework that identifies and addresses the critical success factors (CSFs) for township liquor retailing. The study is based on qualitative interviews carried out with industry experts (as an exploratory study) and liquor retailers from two of Cape Town’s townships, namely Khayelitsha and Mitchells Plain.