OPTIMISING INFORMAL RETAIL: THE ROLE OF BUSINESS OPERATION MANAGEMENT AND COMMUNITY LEADERSHIP IN SPAZA SHOPS PERFORMANCE

This study investigated how business operations management and community leadership influence the performance of spaza shops in South Africa’s informal retail sector. Adopting a quantitative approach and descriptive research design, data were gathered from 359 respondents through structured questionnaires. Structural Equation Modelling (SEM) was used to test hypothesised relationships, with model fit indices confirming acceptable fit (locally owned shops: RMSEA = 0.096, SRMR = 0.0382, CFI = 0.956, TLI = 0.941; migrant-owned shops: RMSEA = 0.108, SRMR = 0.0606, CFI = 0.930, TLI = 0.920). Results showed that business operations management significantly predicted performance in both ownership types, though with greater explanatory power for migrant-owned shops (R² = 0.439; β = 0.662; p < 0.0001) compared to locally owned shops (R² = 0.118; β = 0.343; p < 0.0001). These findings demonstrate that operational efficiency, when combined with strong community leadership, enhances competitiveness and sustainability in the informal retail sector.