My father-in-law ran a shop in the village of Mpoza, Mount Frere. He is gone now. The shop is still there, still open, still serving Mpoza, because the community still needs it, and so it continues. When CK Prahalad wrote that the world’s poorest people are not a problem to be managed but a market to be understood, he was describing something my street in Kwazakhele already knew. The spaza doesn’t need a theory. It has a track record.
When I was 15, an informal settlement arrived at our doorstep in Kwazakhele. Forty years later it remains. Its people, some on the old-age grant, some on the child-support grant, some on the social relief of distress grant, some with work that comes and goes, still shop at that same spaza. My mother still shops there. My sister still shops there. Governments changed. Policies came and went. The grants arrived; the jobs, largely, did not. And the spaza is still the answer, every single morning.
South Africa has over 28 million grant recipients, nearly 45% of the population, with R267-billion distributed in 2024/2025 alone. Where does that money get spent? Carefully, deliberately, in small amounts, at the nearest spaza. This is not a niche market. This is the market.
With unemployment above 30% for decades and youth joblessness near 60%, people who had no place in the formal economy built their own. Not a lifestyle choice. Survival. This is the economy the formal sector calls informal. I call it the economy that showed up when everything else failed.
People imagine a spaza sells only groceries. They miss the point. A single egg at R3. Half a loaf at R8. A R10 airtime voucher. A R20 electricity token. A R2 sachet of washing powder. Increasingly, it is also where grant recipients withdraw cash, avoiding the taxi fare and the two-hour ATM queue. And it is where a schoolgirl buys the one sanitary pad her family can afford that morning, in a country where over two million girls miss school while menstruating. This is not a tuck shop. It is a financial services centre, a pharmacy, a communications hub and a grocer, run from a converted room before sunrise by someone who knows every customer by name.
The spaza is winning
The price point is the point. The spaza restructured its entire offering around what people could actually spend, eliminated transport costs that consume up to 10% of a poor household’s monthly income, and extended credit based on relationship rather than score.
NIQ’s State of the Retail Nation for Q1 2026 confirms what my street has always known: traditional trade generated R43.1-billion in the first quarter alone, with unit sales up 9.1% year on year against just 1.7% for formal modern trade. With over 140 000 traditional outlets versus around 11 000 modern ones, the spaza is winning.
Yet the dominant narrative about spazas is almost entirely negative. Unsafe food. Unlicensed operators. Foreign ownership. Price gouging. What you rarely hear is the obvious counter-question: if the spaza is so dangerous, so exploitative, so beneath standard, why do millions of South Africans, in townships, in villages, on the edges of suburbs, choose it every single day?
They choose it because it is open at 5am when the shift starts. Because it sells one egg, not 12. Because the owner knows their name and will carry them when the grant is late. Consumer behaviour, in every market in the world, is a vote. In the spaza economy, millions of people are voting the same way, every morning. That is not a problem to be solved. It is a signal to be read.
When the factory closed, some opened spazas. Others had no room, no stock, no energy left for that. What they had was a spare room, a backyard structure, a converted garage. So, they rented it. The woman on the old-age grant of R2 090/month, the retrenched worker with no severance and a bond still to pay – for many of them the rent from a spaza operator is not supplementary income; it is the income.
Foreign-owned spazas contribute an estimated R25-billion annually in rent to South African landlords. My father-in-law rented his shop before he passed; the family still receives that rental. Strip out the foreign operator without understanding that web, and you do not protect the community. You impoverish it.
The food safety crisis was real. Children died, and they will die again, not because the spaza owner is reckless, but because we have not fixed what we know is broken. Think about who she is. She lost her job when the factory closed. She had no severance, no safety net beyond a grant, and mouths to feed. So, she opened a spaza, not as a business plan, but as an act of will. Then the system that denied her a bank account, blocked her from buying directly from manufacturers and forced her through unaccountable middlemen. That same system watched a child get sick and pointed at her shop. The stigma lands on her. It lands on every spaza. And the supply chain that failed that child walks away clean. The question is no longer whether we understand the problem. It is whether we care enough to solve it before it costs another life.
A world to be respected
I have sat in boardrooms where this economy is reduced to a slide and the phrase “hard to reach”. The spaza is not hard to reach. It is on every street, open before you wake. My ask is to every bank and every company with a transformation budget and a canteen its own guards cannot afford: go to the spaza, not to study or regulate or acquire it, but to understand it. Bring your supply chain. Formalise the banking relationship. Design for the customer who buys one egg, not a dozen. The spaza owner who serves 200 customers a day and manages credit, stock and cash without a system is not a problem of the economy. She is a lesson in it.
I am not a neutral observer. I left a well-established institution to lead Lesaka Southern Africa, a fintech serving more than two million customers and over 100 000 merchants. The data tells one story: small, frequent, purposeful, relentless. One egg. One voucher. One pad. Each invisible to the formal economy; each, to the person making it, everything.
The spaza has never run a promotion. It has never needed one. It simply opens, every day, for people everything else has walked past. I know those people. I am from those people. Serving the underserved has not been a career choice for me; it has been a life’s calling, shaped by the streets of Kwazakhele, by my father-in-law’s shop in Mpoza, by every community that made me and that I carry with me still. I did not come to this argument from a boardroom. I came to it from a street corner, before sunrise, where someone who looked like my mother was already open for business. That is not a market to be studied. That is a world to be respected.