Independent wholesale has long been a mainstay of the South African trading economy. In the days of apartheid, independent wholesalers were the primary means of bringing brands and produce to the independent retailers who supplied the main market, and they continue to fulfil a valuable role in this regard.
As modern retailers have moved into the townships and rural areas, the independent wholesalers and retailers who stock their stores from these wholesalers have met competitive headwinds. This coupled with a growing number of foreign retailers seeking their fortune in South Africa, poses a real challenge for South African independents.
There has been a high degree of consolidation in the sector, partially in response to this pressure and partly to achieve the economies of scale available to larger groups. Hence the emergence of associations of independent wholesalers into buying groups and member organisations. Another key development has been the rapid emergence of the hybrid or Retail Cash and Carry format, which enables wholesalers to compete directly with retail chains for a share of the lower-LSM consumer’s wallet.