Small food businesses and inflation

In an economy where food prices are dramatically rising, small businesses are
struggling to survive but they are coping thanks to the support they receive
from their customers.

coals sizzle in the long fire pit, as a small fire burns. It’s just past 5pm at
Commercial Street in Fordsburg, and despite the chilly Johannesburg air, a
queue is already beginning to take shape at Amanat Ali’s grill.
Every night,
Ali stands there until 10pm, grilling chicken and beef kebabs on the open
flame. For the Fordsburg community, this is one the tastiest and cheapest spots
to grab a quick, hot meal.

who also owns the Khana Khajana restaurant next door, is smartly dressed in an
ivory coloured shalwar kameez with formal shoes. He takes his business
seriously, allowing no-one else to man the tikka grill with him.

want to do it alone, but if you let us help you, you can get even more food
out,” a customer teases him from the queue in front of the fire.

The Pietermaritzburg Agency for Community
Social Action (Prasca), which has kept an eye on food prices since 2006, found
that in January 2016 a food basket containing starches, sugar, beans, oil,
milk, meat, fish and vegetables costs R1 797. In March, Prasca found this number
increased to R1 869. Research by the Markets
and Economic Research Centre found that in March 2015, the basic food basket was
priced at R508.95. In 2016 it rose to R579.61. The Markets and Economic
Research Centre has less items in their basket, which includes fruit, brown
bread, maize meal, chicken, rice and potatoes.

to the price hike, rent in Fordsburg can be expensive, and Ali, along with his
business partner, split the R30 000 bill between them. They believe their
success has come through their loyal customer base, which consists mainly of
Pakistanis, Indians, and Muslim South Africans. The food, they say, is too
spicy for some South African taste-buds, but it’s the masala marinade that
keeps those who do eat from them coming back for more. Inside the restaurant a chicken or meat curry could cost anywhere between R25-R35 for a plate.

buy stock in bulk, so it makes prices lower, but just two weeks ago I had to
push my prices up by R5. We can’t go up too much or people won’t be able to
afford it,” Ali says.

Fordsburg is bustling with pedestrians in the day and night, street traffic in
Jeppestown is dim in comparison. Some eateries are deserted, but they keep
their prices low to keep whatever customers they have walking through their
door. On a weekday afternoon, the streets are bare, but Henry Igbinoba sits
among the vegetables he sells in his food shop, waiting for customers to buy
his stock.

who hails from Nigeria, initially served Nigerian food before learning that
South African food would bring him more customers. The recipes for the pap and
meat lunches are his wife’s, and each serving comes in a large helping.
Igbinoba has kept his prices at R30-R35 for a plate of pap, protein and salad
to keep his customers.

only get little customers, because there are too many people cooking around
here,” he says. “If I put my prices up, people are going to run out, they going
to cry and complain.”

Igbinoba’s shop is empty, a few blocks down from his food shop, pedestrians can
smell the food emanating from Happyness Maphosa’s braai spot. Maphosa, who came
from Zimbabwe to South Africa, is a jovial woman, who has managed to open three
eateries around communities near the Johannesburg CBD.

previously worked for Nando’s where she learnt what it would take to make a
business work. She charges between R25-R35 for a plate of food, and she knows
why her customers come back: it’s in the way the food tastes. There are other
food places doing better than hers, and she is now thinking of closing down her
Jeppestown branch to save money.

I was the only one doing braai, so it was better. But because of the
competition, my business is low, that’s why I want to close it and focus on the
other two,” she says, standing near the indoor braai.

competition isn’t the only factor: customer convenience is equally important.
Braamfontein, which borders the Johannesburg CBD, is brimming with students who
say they have neither time nor the income to keep cooking meals. Most of these
youngsters will simply order a box of slap chips, drench it in vinegar, mustard
and tomato sauce, and chomp down on salty flavoured potatoes.

prices have risen dramatically in the last year – in November 2015, 10kg of
potatoes were priced at R35 and increased to R60.32 in March 2016 – and the owner of one
small eatery in Braamfontein says that at the prices he’s selling at, he
sometimes makes a loss, having to dig into his own pockets to pay up to R10 000
in rent. But small eatery owners, like this man, keep at their business despite
the hardships, because they believe they are feeding communities and they can
see little where else to put their energies into starting from scratch.

Steers, Debonairs, and McDonald’s are within walking distance of most of the
cheaper fast food eateries in Braamfonteien, but many students ignore them,
savouring the lower prices and the large portions. A small box of chips can be
enough to feed three hungry, stressed students, while at a fish and chips shop
near De Korte street, a piece of hake and chips is enough for two men, taking a
break in their lunch hour. They paid R30 for the meal, splitting it between
them, so that they both leave with full bellies after spending just R15 each.

the bill at any of the other fast food places – a burger will cost R69. So,
that’s R70 spent in a day on food, it’s just too much,” Fiso Morgan (37), a
customer at the restaurant. “Here, we spend R15 each, and I’m full and I still
have enough to give to someone else.”

signals to a homeless man who sits outside the eatery to come over, handing him
what’s left of the parcel of food, and some bread, which the restaurant also

business, you can’t make anything without the customers. Even if you are making
less money, my idea is that you get more customers and you can draw more
business,” says Rizwan Ahmad (29), the owner of the fish and chips shop.

initially was making around 100 000 sales per month, with a profit
margin of 50%, but now his profit margin is at 30% on 250 000 sales.

I first started my prices were high and I wasn’t surviving. Now, my prices are
low and I’m surviving because of high turnover,” he says. “We are winning, we
are not losing.”

night time hits over the business district and its border communities, Ali
begins to start up his fire for another night serving his loyal customers. A
man called Nadeem Mohamed, who tidies up tables and sees to it the customers
are happy, bounds energetically through the restaurant, and occasionally comes
outside to check on the crowd. His salary is R6 000, a generous amount in South
Africa’s food service industry, and his employers can afford to pay it because
even if their prices are as low as can be, their customers, who faithfully
return, help them survive.

call him Pehlwan, which means wrestler,” Mohamed says. “What he is doing is
helping the community.”



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