Deconstructing ‘the foreign’: The limits of citizenship for explaining price competition in the Spaza sector in South Africa

Figures & data

Table 1: Informal-sector contribution to South Africa’s total employment.

Year	Informal-sector employment	Total employment	Informal-sector employment as % of total employment
2006	2 849 035	12 787 285	22.3
2007	2 452 111	13 293 327	18.4
2008	2 398 018	14 561 398	16.5
2009	2 188 124	13 841 980	15.8
2010	2 370 549	13 668 819	17.3
2011	2 350 859	14 131 609	16.6
2012	2 420 190	14 583 192	16.6
2013	2 444 735	15 061 904	16.2
2014	2 514 784	15 146 354	16.6
2015	2 777 657	15 676 015	17.7

Source: Authors’ own calculations using Labour Force Survey 2006–07 and Quarterly Labour Force Survey 2008–15 data.

Table 2: Spaza shop employment (including owners and operators) in South Africa.

Year	Spaza shop employment	% of Spaza shop employment taking place in informal sector	Informal sector Spaza shop employment as % of total informal sector employment
2006	124 761	90.2	3.9
2007	105 999	87.9	3.8
2008	93 432	80.2	3.1
2009	112 861	84.1	4.3
2010	99 687	91.8	3.9
2011	104 871	90.7	4.0
2012	98 555	91.6	3.7
2013	91 301	87.8	3.3
2014	95 044	94.7	3.6
2015	110 499	89.7	3.6

Source: Authors’ own calculations using Labour Force Survey 2006–07 and Quarterly Labour Force Survey 2008–15 data.

Table 3: Location of Spaza shops in the sample.

Location		Number			Row total (%)			Column total (%)
		South African	Foreign	Total	South African	Foreign	Total	South African	Foreign	Total
Cape Town	Capricorn	14	53	67	20.9	79.1	100.0	2.7	9.8	6.4
	Delft South	91	89	180	50.6	49.4	100.0	17.8	16.5	17.1
	Imizamo Yethu	7	53	60	11.7	88.3	100.0	1.4	9.8	5.7
	Overcome Heights	9	13	22	40.9	59.1	100.0	1.8	2.4	2.1
	Phillipi	104	64	168	61.9	38.1	100.0	20.4	11.8	16.0
	Seawinds	18	15	33	54.5	45.5	100.0	3.5	2.8	3.1
	Sweet Home Farm	34	9	43	79.1	20.9	100.0	6.7	1.7	4.1
	Vryground	0	2	2	0.0	100.0	100.0	0.0	0.4	0.2
Durban	KwaMashu	112	14	126	88.9	11.1	100.0	22.0	2.6	12.0
Gauteng	Ivory Park	72	146	218	33.0	67.0	100.0	14.1	27.0	20.7
	Tembisa	49	83	132	37.1	62.9	100.0	9.6	15.3	12.6
All		510	541	1051	48.5	51.5	100.0	100.0	100.0	100.0

Figure 1: Nationality of Spaza shopkeepers in the sample.

Figure 2: Nationality of Spaza shopkeepers by the three cities.

Table 4: Number and proportion of shopkeepers reporting stock by nationality and product.

	South African (n = 510)	Foreign
		Ethiopian (n = 149)	Somalian (n = 236)	Mozambiquan (n = 48)	Bangladeshi (n = 46)	Zimbabwean (n = 28)	Other (n = 34)	Foreign total (n = 541)
1 litre milk	284	90	208	12	32	9	20	371
	55.7%	60.4%	88.1%	25.0%	69.6%	32.1%	58.8%	68.6%
6 eggs	426	140	222	47	45	25	23	502
	83.5%	94.0%	94.1%	97.9%	97.8%	89.3%	67.6%	92.8%
Half loaf of white bread	260	44	169	19	19	7	18	276
	51.0%	29.5%	71.6%	39.6%	41.3%	25.0%	52.9%	51.0%
Full loaf of white bread	62	60	58	19	27	17	12	193
	12.2%	40.3%	24.6%	39.6%	58.7%	60.7%	35.3%	35.7%
250 g sugar	338	134	197	44	42	23	22	462
	66.3%	89.9%	83.5%	91.7%	91.3%	82.1%	64.7%	85.4%
500 g sugar	408	137	217	47	44	26	25	496
	80.0%	91.9%	91.9%	97.9%	95.7%	92.9%	73.5%	91.7%
340 ml Coke	220	94	134	9	43	6	13	299
	43.1%	63.1%	56.8%	18.8%	93.5%	21.4%	38.2%	55.3%
1.5 litre Coke	233	37	203	5	8	4	22	279
	45.7%	24.8%	86.0%	10.4%	17.4%	14.3%	64.7%	51.6%
Jive	81	31	122	2	7	3	14	179
	15.9%	20.8%	51.7%	4.2%	15.2%	10.7%	41.2%	33.1%
Double O	80	13	106	4	6	2	12	143
	15.7%	8.7%	44.9%	8.3%	13.0%	7.1%	35.3%	26.4%
Premium cigarette	419	139	210	43	44	25	24	485
	82.2%	93.3%	89.0%	89.6%	95.7%	89.3%	70.6%	89.6%
Economic cigarette	166	65	148	27	21	14	9	284
	32.5%	43.6%	62.7%	56.3%	45.7%	50.0%	26.5%	52.5%
Average	48.7%	55.0%	70.4%	48.3%	61.2%	47.9%	52.4%	61.1%

Table 5: Mean price per product by location (in cents, 2013 prices).

	Cape Town [I]	Durban [II]	Gauteng [III]
	[I] – [II]	[I] – [III]	[II] – [III]	Mean difference
1 litre milk	700.45	1 230.23	1 181.93	−529.78*	−481.48^#	48.30
6 eggs	675.83	958.92	651.17	−283.08*	24.66^#	307.74^
Half loaf of white bread	434.74	516.41	523.30	−81.68*	−88.56^#	−6.89
Full loaf of white bread	738.71	683.90	642.15	54.81	96.56^#	41.75
250 g sugar	369.61	490.17	399.11	−120.55*	−29.50^#	91.06^
500 g sugar	611.07	774.22	663.21	−163.16*	−52.14^#	111.02^
340 ml Coke	670.78	778.58	720.05	−107.80*	−49.28^#	58.52^
1.5 litre Coke	1 071.01	N/A^a	1 048.46	N/A^a	22.56	N/A^a
Jive	1 106.20	N/A^a	1 203.69	N/A^a	−97.49	N/A^a
Double O	1 094.91	N/A^a	N/A^a	N/A^a	N/A^a	N/A^a
Premium cigarette	163.58	222.40	196.32	−58.82*	−32.75^#	26.07^
Economic cigarette	58.43	108.74	55.49	−50.31*	2.94	53.25^

Notes: ^aN/A indicates not applicable as product was not sold in that site. None of the Spaza shops from Durban in the sample reported to have 1.5 l Coke, Jive and Double O in stock, while none of the Spaza shops from Gauteng in the sample reported to have Double O in stock, at the time of the survey.

*Difference between the mean Cape Town price and mean Durban price is statistically significant at alpha = 5%.

^#Difference between the mean Cape Town price and mean Gauteng price is statistically significant at alpha = 5%.

^{^}Difference between the mean Durban price and mean Gauteng price is statistically significant at alpha = 5%.

Figure 3: Average price per product, South African versus foreign (in cents, 2013 prices).

Table 6: Foreign mean price per product minus South African mean price per product (in cents, 2013 prices).

	Ethiopian	Somalian	Mozambiquan	Bangladeshi	Zimbabwean	Other	All foreign
1 litre milk	183.74*	−172.80*	180.38	183.05*	222.68	−134.47*	−32.53
6 eggs	−98.44*	−95.79*	−113.02*	−111.04*	−95.26*	−101.59*	−99.75*
Half loaf of white bread	21.13	−27.90*	60.89*	16.13	62.92	−48.73*	−9.99
Full loaf of white bread	−26.17	34.20	−87.33*	−65.57	−70.61	43.53	−19.14
250 g sugar	−8.91	−29.19*	9.42	−37.24*	−3.43	−24.69	−18.87*
500 g sugar	−54.85*	−78.92*	−2.51	−46.59*	16.79	−55.52*	−55.97*
340 ml Coke	−21.53	−47.90*	40.99	−5.54	−50.66	−37.93	−30.47*
1.5 litre Coke	42.19	0.35	5.20	−55.26	−7.32	4.62	4.61
Jive	30.46	−5.92	6.43	−51.57	21.92	−20.20	−1.92
Double O	0.75*	−12.36	14.43*	−17.34	14.43*	−24.47	−11.27
Premium cigarette	−12.98*	−29.03*	8.49*	−8.17	17.76*	−18.08*	−16.26*
Economic cigarette	−13.65*	−17.68*	−19.76	−17.51	−20.24*	−20.38*	−17.15*
Total	41.74	−482.94	108.98	−216.65	103.61	−437.91	−308.70

Note: *Difference between the mean South African price and mean foreign price is statistically significant at alpha = 5%.

Figure 4: Total difference in mean price on basket of goods, South African vs other nationality (in cents, 2013 prices).

Table 7: Median foreign price per product minus median South African price per product (in cents, 2013 prices).

	Ethiopian	Somalian	Mozambiquan	Bangladeshi	Zimbabwean	Other
1 litre milk	429.32	−37.25	285.67	412.75	512.75	−17.31
6 eggs	−35.56	0.00	−35.56	−35.56	0.00	0.00
Half loaf of white bread	0.00	0.00	60.88	29.16	53.37	−51.23
Full loaf of white bread	−105.73	52.87	−105.73	−128.96	−128.96	45.69
250 g sugar	0.00	−20.74	9.20	−20.74	0.00	−30.77
500 g sugar	−55.83	−88.42	−35.56	−35.56	−9.97	−55.83
340 ml Coke	−25.77	−55.83	14.34	0.00	−27.91	−55.83
1.5 litre Coke	0.00	−55.83	0.00	−85.70	−55.83	−29.63
Jive	0.00	0.00	0.00	−59.26	0.00	−29.63
Double O	0.00	0.00	0.00	−59.26	0.00	0.00
Premium cigarette	−2.51	−2.51	41.46	−2.51	41.46	−2.51
Economic cigarette	0.00	0.00	−2.96	0.00	0.00	−2.96

Note: It is only possible to test whether the foreign price is statistically significant from the South African price at the mean, but not at the median.

Table 8: Different in cents on the basket of goods by area (mean foreign price – mean South African price).

	Cape Town	Johannesburg	Durban
Bangladesh	−438.99	−321.00	N/A
Ethiopian	99.52	−337.84	−550.90
Mozambiquan	8.73	−193.07	N/A
Somalian	−205.40	−205.83	−526.96
Zimbabwean	−17.33	−194.14	N/A
Other	−193.46	117.29	N/A

Note: N/A = impossible to derive the mean price difference, since these four ‘foreign’ Spaza shops do not exist in Durban in the sample.

Table 9: Johannesburg mean price by nationality – Cape Town mean price by nationality (in cents, 2013 prices).

	South African	Ethiopian	Somalian	Mozambiquan	Bangladeshi	Zimbabwean	Other
1 litre milk	510.00	351.24	563.23	454.63	580.74	516.71	423.04
6 eggs	−20.63	−41.12	10.06	−33.89	−2.87	−15.06	1.98
Half loaf of white bread	85.54	90.47	55.60	73.80	82.26	103.96	151.01
Full loaf of white bread	−69.23	−139.59	−120.20	N/A	−86.39	N/A	292.08
250 g sugar	49.74	13.96	27.22	50.77	10.85	6.20	−13.25
500 g sugar	76.94	−11.13	80.42	80.91	73.19	47.64	41.95
340 ml Coke	55.28	41.79	68.57	78.71	76.53	−3.01	95.37
1.5 l Coke	49.65	19.46	−63.80	−216.57	−186.05	−74.44	N/A
Jive	156.20	N/A	N/A	N/A	77.76	46.47	N/A
Double O	N/A	N/A	N/A	N/A	N/A	N/A	N/A
Premium cigarette	45.11	13.05	30.90	33.90	25.36	49.69	34.39
Economic cigarette	−5.85	−2.89	−2.56	−6.00	1.89	−2.25	2.87

Note: N/A means not applicable as these nationalities of shop keeper were not found in the survey.

Table 10: Ordinary least squares regressions on log real price (in cents, 2013 prices).

	1 litre milk	6 eggs	Half loaf of bread	Full loaf of bread	250 g sugar	500 g sugar
Province: Cape Town	−0.494***	−0.253***	−0.055	0.116	−0.191***	−0.151***
Province: Gauteng	−0.096**	−0.312***	0.017	−0.175*	−0.184***	−0.152***
Nationality: Ethiopian	0.110	−0.022	−0.088**	0.076	0.015	−0.023
Nationality: Somalian	−0.036	0.043	0.069	0.316	−0.091	0.018
Nationality: Mozambiquan	0.053	0.033	N/A	N/A	−0.071	0.046
Nationality: Bangladeshi	−0.024	0.001	0.038	0.006	0.042	0.044**
Nationality: Zimbabwean	0.050	0.013	−0.107	N/A	0.165**	0.154**
Nationality: other	0.069***	0.046***	0.031**	0.080***	0.017	0.043***
Gender: female	0.004	0.012	−0.017	−0.063**	0.014	0.014
Gender: unspecified	0.010	−0.045**	−0.025	−0.004	−0.088***	−0.020
Age in years	0.003	0.006**	0.002	−0.017**	−0.001	0.000
Age in years squared	0.000	0.000**	0.000	0.000**	0.000	0.000
Dummy: unspecified age	0.005	0.107**	−0.016	−0.319***	−0.070	−0.033
Structure: formal house	0.016	0.026***	0.035**	0.232***	0.005	−0.008
Structure: Wendy house	0.058***	0.019*	0.025*	0.025	0.028*	0.008
Structure: other	0.050*	0.032**	0.042**	0.016	0.033	0.007
Structure: unspecified	−0.067**	0.040**	0.031	0.018	0.004	−0.023
Time in business in years	−0.003	0.000	0.002	0.002	0.000	0.000
Dummy: time in business unspecified	0.010	−0.005	−0.039*	0.010	0.016	−0.009
Number of workers: two	−0.007	0.000	−0.006	0.021	0.002	−0.044***
Number of workers: three or more	0.004	0.005	−0.040	0.004	−0.007	−0.039**
Number of workers: unspecified	−0.095**	−0.014	−0.053	−0.024	−0.002	−0.060***
Ownership: rented	−0.059***	−0.029***	−0.016	0.103***	−0.029	−0.032**
Ownership: unspecified	−0.148***	−0.050***	−0.036***	0.041	−0.058***	−0.062***
Constant	7.146***	6.662***	6.187***	6.699***	6.179***	6.669***
Sample size	655	928	536	255	800	904
R^2	0.7362	0.6048	0.3971	0.5118	0.2746	0.3518
Adjusted R^2	0.7262	0.5943	0.3700	0.4656	0.2522	0.3341
F-statistic	73.26	57.58	14.66	11.06	12.23	19.88
Prob. > F	0.0000	0.0000	0.0000	0.0000	0.0000	0.0000
	340 ml Coke	1.5 litre Coke	Jive	Double O	Premium cigarette	Economic cigarette
Province: Cape Town	−0.082***	0.092**	−0.140***	N/A	−0.250***	−0.358***
Province: Gauteng	−0.068***	N/A	N/A	N/A	−0.084***	−0.476***
Nationality: Ethiopian	0.018	−0.008	−0.019	−0.024	0.016	−0.056
Nationality: Somalian	0.081	N/A	N/A	N/A	0.158**	−0.032
Nationality: Mozambiquan	N/A	0.020	0.017	N/A	0.033	−0.033
Nationality: Bangladeshi	0.095***	0.011	0.037	0.018	0.041**	−0.003
Nationality: Zimbabwean	−0.043	0.063	−0.113*	N/A	0.133**	N/A
Nationality: other	0.022*	0.014	0.034***	0.029***	0.042***	0.062***
Gender: female	−0.017	−0.013	−0.039***	−0.013	0.009	−0.003
Gender: unspecified	−0.062***	0.030*	−0.029	0.006	−0.046**	−0.120*
Age in years	0.012***	−0.003	−0.025***	N/A	0.001	0.009
Age in years squared	0.000***	0.000	0.000***	0.000	0.000	0.000
Dummy: unspecified age	0.191***	−0.070	−0.409***	N/A	0.007	0.033
Structure: formal house	0.005	0.051***	0.032**	0.034***	−0.001	−0.002
Structure: Wendy house	0.002	0.059***	0.028**	0.039***	0.031***	0.028
Structure: other	−0.002	0.051***	0.052***	0.017	0.009	−0.071**
Structure: unspecified	−0.011	−0.060***	0.004	−0.002	0.000	0.045
Time in business in years	0.001	−0.001	0.000	−0.002	0.001	0.000
Dummy: time in business unspecified	0.022	−0.013	−0.009	−0.003	−0.003	0.010
Number of workers: two	0.026*	−0.146***	0.220***	−0.014	−0.037***	0.058**
Number of workers: three or more	0.005	−0.187***	0.253***	N/A	−0.036**	0.058
Number of workers: unspecified	0.017	−0.177***	0.251***	N/A	−0.007	0.075*
Ownership: rented	−0.017	0.019	0.021	0.065***	−0.033***	−0.156***
Ownership: unspecified	−0.048***	0.009	0.008	0.046***	−0.046***	−0.154***
Constant	6.403***	7.089***	7.264***	6.928***	5.346***	4.428***
Sample size	519	512	260	223	904	450
R^2	0.3808	0.3006	0.2864	0.1698	0.5501	0.6725
Adjusted R^2	0.3520	0.2692	0.2202	0.1097	0.5378	0.6548
F-statistic	13.24	9.55	4.32	2.82	44.79	38.03
Prob. > F	0.0000	0.0000	0.0000	0.0000	0.0000	0.0000

Notes: ***Significant at 1%. **Significant at 5%. *Significant at 1%.

N/A = explanatory variable is omitted due to perfect collinearity.

Table A1: Demographic and work characteristics of the respondents in the survey.

	South Africa (n = 510)		Foreign (n = 541)		All (n = 1 051)
	n	%	n	%	n	%
Gender
Male	258	50.6	462	85.4	720	68.5
Female	193	37.8	29	5.4	222	21.1
Not specified	59	11.6	50	9.2	109	10.4
Age in years
Below 25 years	22	4.3	80	14.8	102	9.7
25–34 years	59	11.6	124	22.9	183	17.4
35–44 years	55	10.8	33	6.1	88	8.4
45–54 years	55	10.8	3	0.6	58	5.5
55 years or above	31	6.1	3	0.6	34	3.2
Not specified	288	56.5	298	55.1	586	55.8
Structure of Spaza business
Formal house	87	17.1	103	19.0	190	18.1
Wendy house	141	27.6	154	28.5	295	28.1
Brick building	70	13.7	142	26.2	212	20.2
Other	12	2.4	43	8.0	55	5.2
Not specified	200	39.2	99	18.3	299	28.4
Time in business in years
Less than 1 year	35	6.9	108	20.0	143	13.6
1 year	43	8.4	74	13.7	117	11.1
2 years	43	8.4	100	18.5	143	13.6
3 years	38	7.5	56	10.4	94	8.9
4 years	33	6.5	29	5.4	62	5.9
5 years	34	6.7	35	6.5	69	6.6
6–10 years	101	19.8	37	6.8	138	13.1
More than 10 years	90	17.6	11	2.0	101	9.6
Not specified	93	18.2	91	16.8	184	17.5
Total number of workers (including owners)
1 worker	62	12.2	55	10.2	117	11.1
2 workers	66	12.9	136	25.1	202	19.2
3 or more workers	26	5.1	93	17.2	119	11.3
Not specified	356	69.8	257	47.5	613	58.3
Ownership of premises
Owned	288	56.5	28	5.2	316	30.1
Rented	70	13.7	361	66.7	431	41.0
Not specified	152	29.8	152	28.1	304	28.9