An important component of the informal economy in South Africa,
the Spaza sector is portrayed as dominated by foreign nationals who
outcompete South African shopkeepers on price. Indeed, this
business competition from foreign nationals is a key reason given
to explain xenophobia in South Africa. This article sets out to
interrogate this widely held assumption. Drawing on evidence
from over 1000 Spaza shops from South Africa’s three main cities,
the article makes the case that business competitiveness does not
correspond with ‘foreign’ or South African identities in a simple
way. Firstly, while citizenship or nationality is a factor, it is not
captured by the labels of ‘foreign’ versus South African, as there
are significant differences by nationality within the ‘foreign’.
Secondly, not all foreign nationalities out-compete South Africans
on price. Thirdly, place matters too, not only because we find
different nationalities in different cities, but also because there are
different patterns of price competition by nationality in each
place. Lastly, there are product-specific dynamics that impact on
price more profoundly than nationality. For example, regardless of
nationality, milk is cheaper in Cape Town and bread is cheaper in
Johannesburg.