Tiger Brands is intensifying its push into South Africa’s informal retail sector, identifying township spaza shops as the fastest-growing distribution channel in its portfolio as it seeks to deepen brand presence and volume growth in a highly competitive consumer market.
The group says its strategy is centred on selectively expanding reach rather than attempting to serve every informal outlet in the country. Management believes widening distribution to an additional 50,000 spaza shops would materially strengthen market penetration, while acknowledging that servicing the entire universe of informal traders would be neither practical nor economically sustainable due to high logistics and servicing costs.
Internally, Tiger Brands already supplies around 110,000 informal stores, and the company sees scope to raise that figure to between 150,000 and 160,000 outlets through more efficient deployment of on-the-ground sales teams. The emphasis is on ensuring that high-frequency consumer products dominate spaza shop shelves, reinforcing brand relevance at the point of purchase where many South Africans buy staple foods daily.
The renewed focus reflects the scale of South Africa’s informal economy, estimated to generate annual turnover of about R900 billion. According to Statistics South Africa, the sector plays a critical role in employment and household consumption, particularly in townships and rural areas where formal retail infrastructure is limited.
Tiger Brands is not alone in targeting this market. Pepkor has positioned informal trade as a core growth pillar, with its long-term investment in fintech platform Flash enabling access to roughly 175,000 informal traders nationwide. Flash integrates digital payments, prepaid services and distribution tools, allowing informal traders to operate more efficiently while remaining cash-focused in an economy where digital adoption is uneven.
Financial services groups are also expanding their footprint. TymeBank has partnered with Kazang to offer working capital solutions to licensed taverns and liquor outlets using point-of-sale devices, while Capitec has flagged the informal sector as a priority for its small business banking and credit offerings. As reported by Business Day, these moves reflect growing competition among banks to serve previously underbanked traders.
For Tiger Brands, success in the informal market could help offset pressure from cost-conscious consumers and slower growth in formal retail. However, execution will depend on balancing distribution efficiency with affordability, making the spaza channel not just a growth opportunity, but a strategic necessity in South Africa’s evolving consumer economy.