Foreign-Owned Spaza Shops and Local Micro-Retail Development in Johannesburg, South Africa.

Foreign-owned spaza shops have become a prominent feature of South Africa’s township retail economy, particularly within major urban centres such as Johannesburg. While these enterprises contribute to improved consumer access, competitive pricing, and business innovation, their growing presence has also generated concerns regarding the sustainability of locally owned micro-retail enterprises. The purpose of this study was to examine the impact of foreign-owned spaza shops on local micro-retail businesses in selected Johannesburg townships and to identify strategies for promoting inclusive and sustainable township economic development. A mixed-methods research design was adopted, combining quantitative survey data collected from 200 spaza shop owners with qualitative interviews conducted among 40 participants comprising shop owners and community residents. Quantitative data were analysed using descriptive statistics, independent samples t-tests, chi-square tests and regression analysis, while qualitative data were analysed through thematic analysis. The findings revealed that foreign-owned spaza shops generally achieved higher levels of revenue and profitability due to stronger supply-chain networks, bulk purchasing arrangements, disciplined reinvestment practices and more effective inventory management systems. However, locally owned shops demonstrated stronger community integration and contributed more significantly to local employment creation. The study further found that access to capital, inventory management capabilities and community engagement were significant predictors of business performance. The findings suggest that sustainable township retail development requires policy interventions that enhance the competitiveness of local micro-enterprises without excluding migrant-owned businesses. The study contributes to the growing body of knowledge on township entrepreneurship, migrant enterprise development and informal sector competitiveness by demonstrating that differences in business performance are largely attributable to capabilities, resources and institutional support rather than ownership nationality alone. Keywords: Spaza shops; township economy; migrant entrepreneurship; micro-retail enterprises; local economic development; informal economy; Johannesburg; South Africa.