The 2019 market inquiry by the Competition Commission unequivocally states that national supermarket chains must stop enforcing exclusivity provisions – or provisions that have a substantially similar effect – in their lease agreements against SMMEs, speciality stores and other grocery retailers in shopping centres located in non-urban areas.
When it came to remedial action, the report states that “the enforcement of exclusivity by the national supermarket chains as against other grocery retailers must be phased out by the next extension of the lease, or within five years from the date of the publication of this final report, whichever is earlier”.
OBC Better Butchery – which has had a footprint in the black retail market for over three decades – was one of the companies that made a submission to the Competition Commission in 2019 on the power wielded by the major national supermarket chains over enforcing exclusive provisions in their lease agreements against challenger retailers and speciality stores.For the year to September 2022, Spar Southern Africa posted an 8.4% rise in wholesale turnover to R88-billion.
In all four cases, the landlord is Vukile Property Fund. However, Vukile declined to comment and took exception to having its name published.“The landlords have told us they do not agree with this exclusionary practice or support it, but they are bound by the terms of the signed lease agreement. This exclusionary conduct prevents competition and the loss on average of 30 to 50 potential job opportunities per store in the area,” he adds.
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