HCP Discussion Paper No. 23: Food Vending and the Urban Informal Sector in Cape Town, South Africa
In South Africa, the informal food sector is either criminalized or ignored, despite the important role it plays in the economy in terms of employment, income generation, food distribution, and general livelihoods. This paper assesses the nature, operations, strategies, and challenges of the informal food sector in Cape Town. Data was collected through a survey of over 1,000 informal food vendors in the city. Survey results indicate that most of the enterprises were single-owner businesses, financed from personal savings, and started by owners seeking employment, independence, and improved financial security for their families. Most businesses had little or no access to finance from government agencies, banks or micro-finance lenders. Entrepreneurs faced challenges ranging from insufficient sales, competition, changing consumer food needs, and rising stock prices. To survive in a challenging economic environment, entrepreneurs were adopting various strategies including changing the types of foods they sell, increasing food stock variety, monitoring formal food retailing prices, and negotiating with suppliers for favourable stock prices. While there has been much debate on the effect of supermarketization on small food retailers in the country, results from this survey are inconclusive. Despite the various challenges being experienced, the informal food sector has become an integral and indispensable component of the food system of the city.