When Trevor Rakiki’s fledgling franchise Kota Central was in full flight, he could count on not just the clientele in Ebony Park, Midrand, and its surrounds, but also on booming demand from workers in open-plan offices in some of the area’s well-known office parks.
“We used to do bulk orders for most corporates, even as far as Bryanston,” Rakiki said on MetroFMTalk last Tuesday. “(We) once delivered for Nestlé, which was a very huge order ... we had to close our store for almost the entire day just to do the orders for them.”
It was a “good story to tell” — until Rakiki and his team had to post on their Facebook page on November 16 that they were permanently closing their business. Before this, their kota menu had drawn many a laugh as the items were named after politicians. The priciest item on the menu was named after the Gupta family.
If you were short on cash you could, for just under R24, get the “Gwede” — a kota with chips, lettuce, atchar, polony, cheese and cucumber. If you had more means the “Jacob Zuma”, with additional egg, viennas, ham, bacon and a burger patty, was quite a mouthful at R56.
It seems that load-shedding, on top of several other challenges, halted the plans and designs of this company. What we might learn from how it emerged and ultimately exited (for now, Rakiki insists) its market, is a telling tale of how small firms are navigating a difficult trading environment.
As with most matters in SA, the ability to contain and manage the numerous crises firms confront is not evenly distributed. Those with enough cash reserves to invest in inverters and generators have managed to maintain trading time that would otherwise have been lost. Those without such resources in reserve, have to hope against hope that the troubles at Megawatt Park will be solved soon.
While the lack of electricity may have been the straw that broke Kota Central’s back, Rakiki frankly admits that there are other challenges that led to the difficult decision. Fuel, gas, bread, processed meat and other prices rose in quick succession last year. So too did his rental costs.
"I think [when we do reopen] we are looking into getting a better space where there is more clientele, more like opening at a mall or shopping complex so we stop being in a township", he says.
While policymakers are looking to revitalise the township economy, Rakiki and other entrepreneurs are looking for ways to leave. In its half-year trading update Woolworths related how one of its divisions had reduced trading space by 2,2%, while on the other side of the tracks retailers like Rakiki are looking to expand trading space in the same malls. This makes sense, as much of the consumer footfall and purchasing volumes remain in suburban malls.
In addition to inventory cost, electricity and space challenges, Rakiki expressed frustration with what he felt was the “spatial redlining” of township-based enterprises on food delivery apps. Food delivery orders are an increasingly important avenue of sales for fast food retailers, in addition to corporate orders and walk-ins. Having this extra sales channel can be the difference between meeting your operational costs or not.
Rakiki had to underwrite his own deliveries, without the last mile supply chain benefit that being on a food delivery app provides. Township-based food retailers find difficulty in listing on food delivery apps that would allow them access to customers in neighbouring suburban areas. “Funnily enough, all the stores in Soweto are available on Mr D and UberEats. Why not in Tembisa,” he asks.
With his two branches closed, Rakiki is considering the franchise route, “just to keep the brand alive”. Anything to keep his fast-food business dream alive. Hopefully his customers, in the township and the office parks, will not have forgotten him by the time he dusts off his fryers, which are now in storage, and returns to work.
• Cawe (@aycawe) is a development economist and author.
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