Bread trade goes stale

6 Jun 2017

When Pretoria businessman Noah Msibi, 33, opened his bakery in 2010, business was booming. He sold more than 1,000 loaves a day and employed 15 people from Saulsville township.

©Tyler Olson via 123RF

Today Mbisi's Glo Bake barely sells 500 loaves a day, he has had to retrench six employees and the business is sinking fast, despite his bread being the cheapest. In his submission during the first day of the Competition Commission's inquiry into the grocery retail sector in Pretoria yesterday, Msibi put the blame squarely on the emergence of grocery retail giants Shoprite and Pick n Pay.

The demise of his business was compounded by the flooding of the market by foreign-owned shops, which he said would not support local businesses. He said there was one Shoprite in Saulsville when he opened his shop, but business started dwindling when two more Shoprite supermarkets and a Pick n Pay opened their doors, all within 10km of his business.

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"Our businesses are closing down. The market is killing us. In 2015, when the Shoprite opened, I lost my entire clientele of bunny-chow sellers, who used to buy bread from me," Msibi said.

He charges R6.50 for a 600g loaf of bread and Shoprite charges R7 but can sell them for R6 per loaf when they have specials. Msibi said the biggest advantage the retail giants had was that they were in shopping malls.

He said the demise of township businesses was an emotive issue. "A huge bakery that I found operating in the township, which employed 20 people, closed down in March," he said.

The commission initiated the grocery retail market inquiry as it believes there are features in this sector that may prevent, distort or restrict competition.

Source: The Times

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