Monwabisi Park Spaza Market

1. RECORD KEEPING

Another major issue that we investigated in terms of how shop owners run their businesses is what record keeping practices, if any, they utilize. By investigating record keeping in spaza shops we could learn more about the level of education that shop owners have received, as well as judge whether the TTO’s capacity building sessions could be usefully applied to the shop owners in Monwabisi Park. For the purposes of our project, we considered a shop owner to keep complete business records if they kept track of their purchases and expenses, took inventory regularly, and kept track of their sales and profits. We found that some shops kept no records at all, some shops kept complete records, and many shops were somewhere in between those two extremes. Based on our research, we have found that only a minority of spaza shops in Monwabisi Park keep complete business records. As a result, at least in terms of record keeping skills, we decided that capacity building sessions could be beneficial. The chart below highlights record-keeping among key informant interviewees.

Graph of records kept by the eleven spaza shops

2. BUSINESS TRAINING

Through both interviews and group discussions, our team also tried to gain a better understanding of the general levels of business skills that shop owners in Monwabisi Park possessed. While some shop owners said they had no training at all, a good number had received some sort of informal training. This education typically came from a friend or family member, or from a different job where skills could sometimes be transferred to running a spaza shop. Some shop owners also said that they had received formal business training, either through a school or some sort of programme. Particularly during our focus group discussion, we asked shop owners whether they thought that they needed improved business skills in order to run their shops profitably, and an overwhelming majority of the shop owners replied that they did feel further training was necessary. The chart below illustrates the levels of business skills training that we observed in the Monwabisi Park spaza owners.

Graph of shop owners previous business training

3. SUPPLY CHAIN ISSUES

Because the TTO’s Shop-Net programme is primarily intended to alleviate supply chain problems faced by spaza shops, we investigated those issues during our interviews and focus group discussions. Our key findings are:

• Spaza shops were not receiving goods at discounted prices.
• Spaza shops were not getting their goods delivered.

Through key informant interviews the team learned that shop owners in Monwabisi Park do not receive any special discounts because they run spaza shops.  When the shop owners buy their goods from the wholesalers or use discount cards they pay the same amount as any other consumer could pay. As a result their prices cannot compete with super markets or neighboring Somalian shops that do receive bulk discounts.

We also found that shops do not get all of their goods delivered, and must shop for their own stock.  The owners travel to the store an average of three days a week.  Half of the shops interviewed said they had to close their shops in order to travel to the store.  The shops also have the additional cost of transportation. While some shop owners own their own cars, forty percent of those interviewed said they had to hire a taxi service to carry their goods. With the lack of discounts on goods, and the money lost in getting goods from the supermarket, Shop-Net would be helpful to the spaza shop owners in Monwabisi Park.

4. VIEWS ON COMPETITION AND COOPERATION

Our key findings are:

• Shop owners see competition with other spaza shops as a major issue.
• Shop owners do not trust each other.
• There are no current channels of communication among spaza shop owners.
  

  Outside a Somolian shop

A third of the shop owners saw competition as the main problem their shop faced.  The majority of these shop owners thought there were too many spaza shops in their area, who are able to sell their goods at lower prices. Many of these shops are run by foreign Somolian shop owners.  These shops often have a larger range of goods, are much cleaner than most spaza shops, and have better advertising. The success of the Somolian shop owners has lead to resentment from the native spaza shop owners.

There is currently little to no communication between shop owners.  They are aware of each others prices because the customers often refer to competing shops when purchasing goods.  However, this is all they know about other spaza shops. When neighboring shops owners have conversations, they do not discuss business.

The charts below shows that people initially saw the other shop owners as too much competition and would not be willing to work together. After understanding through cooperation they might be able to purchase their goods on discount and derive other benefits, they often became open to the concept of working with each other.  This shows the importance of educating the shop owners on the possibilities and benefits of cooperation, which was done during the capacity building information session.

Figure 16 Shop Owner co-operation with explanation for the eleven shop owners interviewed