Cut-throat competition in the supermarket industry : impressions of the managers of selected supermarkets in Amanzimtoti

Abstract

The number of shopping malls is proliferating across the face of South Africa year after year despite the mounting evidence that they are declining across the globe due to a number of factors. This includes, amongst others lifestyle changes, emergence and growth of on-line shopping, rising cost of utilities and fuel, thinning wallets and thinning threshold populations. While the United Nations calls for a more sustainable form of development (Sustainable Development Agenda 2030) that is mindful of how things connect to and affect one another systematically, older concrete structures are being abandoned to decay to the promotion of social degeneration, environmental despoliation and loss of income for developers and shop owners. Objective: The study determine the effects, in terms of threshold populations and profitability, of this form of excessive development to existing and new supermarkets, which tend to be used as key tenants in shopping malls. Method: The study was non-experimental, descriptive and deductive in nature. The method used was qualitative and the data collection technique was interviews with the general managers of 10 of the 12 supermarkets found within a 5kilometre radius of the old Amanzimtoti CBD. The study design was cross-sectional case study of selected supermarkets in Amanzimtoti. The data collection tools were observation, semi-structured interview schedules. The sampling frame was non-representative as supermarkets were selected to avoid repetition of the same brand twice except in case where the size and variety of goods was different. Results: Competition in the supermarket industry is cut-throat in the area of study. Competing supermarkets had to come up with a number of operational strategies such as revamping the shops, adding more products to their lines. In addition, they determine prices on a weekly basis, bargaining with suppliers in order to keep the prices competitive. Managers also spend more time on the shop floor in order to keep on the pulse of product movement, dates and customers, even sacrificing staff (more workload, retrenchment strategies, etc.) in order to remain profitable. Conclusion: In order to facilitate sustainability all developments should be viewed in terms of them being systems within other systems and enhance the growth and sustainability of systems that already exist within the respective area. Consequently, it is important for the local municipalities, developers and supermarket shareholders to involve managers as practitioners in proposed developments and how such developments would affect the stores that manage.