The expansion of regional supermarket chains: Changing models of retailing and the implications for local supplier capabilities in South Africa, Botswana, Zambia, and Zimbabwe

Image: Flickr, Rob Beechey / World Bank
Image: Flickr, Rob Beechey / World Bank


Qualitative analysis based upon desktop research on supermarket value chains in Southern Africa, as well as empirical research based upon interviews conducted primarily with retail chains, buying groups and property developers in Southern Africa.

Research Objective

To undertake a regional review of the spread of South African supermarkets, the different retail models employed, the implications for local suppliers, and the impact on competition.


  • Spread of supermarkets in Africa in early 2000s mainly caused by FDI from larger, richer African countries. Other factors: increasing urbanization, the entry of women into the workforce, increased per capita income, rise of the middle class, lower costs due to economies of scale, transport economies, improved modern infrastructure
  • Shoprite, Pick n’ Pay, Spar, Woolworths and Fruit & Veg City all have expanded from South Africa to develop stores in the region.
  • Spread of SA supermarkets facilitated by increased sale of dry, processed foods which allow easier realisation of economies of scale. Also from centralised procurement. More supermarkets in the region allows increased exports of food from SA to the region.
  • Trend now changing from South African supermarket chains spreading in the region to other SADC country chains spreading throughout Southern Africa. Most notable e.g.: Botswana’s Choppies now spreading from Botswana to SA, Zimbabwe and Zambia, plans to continue expansion in Africa.
  • Barriers to entry for the establishment of supermarkets throughout Southern Africa: perishable goods require large investments in logistics, distribution, and inventory maintenance and advertising, also local content policies in most countries.
  • Zambia is beginning to export soaps, detergents, candles and cereals to DRC due to increased industrialisation in Zambia and increased presence of supermarkets in DRC.

Policy Recommendations

  • Continued investment in distribution centres in the region will lead to increased presence of supermarkets, which will facilitate regional flow of consumer goods.
  • Continued capacitation of independent retailers in the region, such as linking them to buying groups, can also create markets for regional flow of goods.
2 Jun 2016




United Nations University World Institute for Development Economics Research


Supermarkets (Consumer Goods)


Botswana, South Africa, Zambia, Zimbabwe


Supermarket, Suppliers