The Competition Commission has found that small township and rural retailers pay more for stock than national chains do, and it has said it will take up the problem with municipalities and other authorities. In a report published on 3 September 2026, the commission said South Africa’s rural and township economy is worth an estimated R900 billion and is largely informal and untaxed.
Ahmore Burger-Smidt, head of regulatory at law firm Werksmans Attorneys, told BusinessTech that the report is worth reading closely by anyone who trades in these areas. “For any organisation with a presence in or connection to township and rural markets, the report warrants careful attention,” she said.
## Where small retailers pay more
The commission’s Rural and Township Economy Project was written by Qhawe Mahlalela, Tessa Bleazard and Zintle Siyo. It draws on a literature review, the commission’s enforcement experience and two surveys, one of businesses and one of consumers, according to a Polity analysis.
The first barrier is procurement. National chains and franchises are tied into large formal supply networks, while independent and informal businesses, the great majority of firms in these areas, buy through smaller suppliers and intermediaries. They face higher costs and weaker bargaining positions because they order in smaller volumes. About 65% of the inputs of township national chains come from large formal wholesalers, the commission found, according to the commission’s summary of the findings. Procurement difficulties show up in agriculture, construction, hair and beauty, hospitality, health services and retail.
Business Day reported that nearly half of the entrepreneurs surveyed believe suppliers charge them more because of their size, rising to 61% among independent operators. Consumers pay the price as well. Deputy Minister Zuko Godlimpi said residents “faced higher effective prices due to limited product variety and quality” and often have to travel out of their communities to buy goods and services.
The second barrier is access to selling space. Small businesses struggle to reach malls, shopping centres and e-commerce platforms because of high costs and exclusivity arrangements, the Polity analysis said.
## Red tape and low incomes
The report describes “complex, onerous and costly regulatory burdens”, among them permits, licences, zoning restrictions and municipal by-laws, which weigh most on the smallest firms because they have the fewest resources for compliance. The Polity analysis said the commission also proposes rethinking how competition is assessed in these markets, looking at how consumers actually behave rather than at theoretical assumptions about geographic reach.
The customers are poor. According to the commission, 53% of rural town residents and 47% of residents of large townships earn less than R3,500 a month, as do 39% of people in metro townships. Business Day quoted the report as putting the figure at 53% of rural residents and 37% to 47% of township residents, so the township numbers differ slightly between accounts.
## What the commission plans to do
Competition Commissioner Doris Tshepe called for “coordinated action by business, local government, regulators and key role-players”, with a focus on competition advocacy, engagement with those affected and targeted research. The commission plans to talk to municipalities, local government associations and the Department of Small Business Development about regulatory burdens that could be simplified.
It also flagged enforcement. Burger-Smidt said the report “does not shy away from the possibility of enforcement action”, and the Polity analysis said the commission intends to pursue exclusionary access to retail channels and discriminatory procurement. Her conclusion was that “whether the practical impact will be felt primarily through enforcement, through policy reform, or through a combination of both, the direction of travel is unmistakable.”
Business Day noted that Cabinet approved a township and rural economy development policy in March 2026, which aims to reduce regulatory burdens and turn consumption-driven areas into productive hubs linked to the mainstream economy.
So far the commission’s work is a research report and a set of proposals, not a set of rules or cases. Related coverage is in our retail and consumer, SME and entrepreneurship and regulatory policy sections.
