February 12, 2004

By Roy Cokayne

Pretoria - More than 36 percent of hawkers and street vendors viewed their businesses as permanent career paths.

A study conducted by the Bureau for Market Research at Unisa also revealed that 76.8 percent of township general dealers and 57.2 percent of spaza shop owners indicated they would not accept a job in the formal sector.

The report, titled Size, Structure and Profile of the Informal Retail Sector in South Africa, was released yesterday.

Ligthelm said sales in the informal retail trade sector were about R32 billion in 2002 - about 10 percent of total retail sales in South Africa.

The relative stability of the informal sector was also confirmed by the survival rate of the various types of business, according to the bureau's research director, Andre Ligthelm.

He said the sector was, therefore, increasingly being acknowledged by manufacturers and wholesalers as an important delivery channel of goods to consumers.

The report said 19 percent of hawkers and street vendors, 63.7 percent of general dealers and 36 percent of spaza shops had been in operation for longer than five years.

The study also found a considerable link between the informal and formal sectors, which was in contrast to the frequently expressed view that these sectors operated as two separate "economies".

Ligthelm said links manifested in various ways, such as increased product delivery to informal retailers, promotion sales available to them and even the availability of supplier credit, especially to township general dealers.

"The link contributes considerably to the survival potential of small informal retailers, especially due to the availability of merchandise at affordable prices," he said.

Ligthelm said this allowed them to continue trading, adding that the lack of trading stock was often cited as the most serious problem encountered by informal retailers.

The study revealed that almost 90 percent of informal retailers received delivery of merchandise while 13.4 percent of township general dealers and 8.6 percent spaza shop owners, excluding hawkers or street vendors, received credit support.

Ligthelm said the picture emerging was of informal retailers ranging from fairly developed businesses to enterprises purely established for household survival.