The regulatory groundwork to overhaul the grocery retail market was begun this week.
It came with submissions to the Competition Commission during public hearings.
In the Johannesburg and Pretoria hearings, the big four grocery retailers - Massmart, Shoprite, Pick n Pay and Spar - came under scrutiny.
David-and-Goliath stories were told to the inquiry's panel, leaving analysts pondering the possible outcomes for the industry.
Alec Abraham, a senior retail analyst at Sasfin Wealth, said: "The most palatable approach would be for the big four retailers [to] contribute to a development fund that supports independent suppliers."
Abraham did not expect the commission to protect smaller retailers in order to save the few jobs they created and penalise big retailers, which employed far more people.
"The big retailers employ many more people and in my view it doesn't make sense that you are now going to put society in a worse position on a net basis for the benefit of a smaller group of independent traders," Abraham said.
The inquiry was set up by Economic Development Minister Ebrahim Patel in 2015 to come to an understanding of the dynamics of the retail sector and to assess competition among retailers.
Lulama Mtanga, a panelist at the inquiry, said: "The findings of the inquiry will provide a factual basis upon which the panel can make evidence-based recommendations to the minister of economic development in order to promote competition."
In South Africa, the informal food market constitutes 35% of the total food-retail market, RMB Morgan Stanley estimates.
Other members of the panel include chairman Halton Cheadle and Louise du Plessis.
Shoprite, a discount brand in the Shoprite Group stable that targets price-conscious lower-income consumers, has had the worst effect on small retailers, it was claimed.
Noah Msibi, who owns Pretoria-based bakery Glo Bake, said the opening of a second Shoprite store in the township where he operated his business had killed his market.
"We are hungry, our businesses are closing down," said Msibi.
"Not that we are failing to run businesses, but the market is killing us. In 2015, when the [latest] Shoprite opened, I lost my entire clientele of bunny-chow sellers who used to buy their bread from me," Msibi said.
He charged R6.50 for a 600g loaf of bread and Shoprite R7, Msibi said, but the chain could offer cheaper alternatives, down to R6 a loaf, when it had specials.
In other emerging markets, such as India, the government has implemented policies that protect local and informal industries from the onslaught of formal retail chains.
In addition, requirements stipulate that international retailers source at least 30% of their goods from small and mid-size Indian producers which make it impossible for foreign supermarkets to open.
The inability to buy goods at scale is one of the major challenges informal retailers face, while suppliers face difficulties in getting the stock into national retail brands.
In 2011, Walmart bought South Africa's Massmart. After competition commission scrutiny, the deal led to a supplier development fund.
Other industry players are finding innovative ways for informal players to enter the market.
Tim Strang, CEO of Spazaapp, said: "It came out of two separate needs, the informal market desperate to get the best price possible at the right price."
Spazaapp is a mobile application that connects spaza and informal-market players with large, fast-moving consumer goods (FMCG) companies.
"It's ridiculous in South Africa that you've got this long market chain and the people that need the best price are often paying three or four times the markup," said Strang.
R1 in every R5 was spent in the informal market, he said.
"That base of our economy is supplying a lot of jobs and a lot of people with a way of living and surviving."
The group works with big FMCG companies such as Uniliever, Johnson & Johnson and Tiger Brands.
Sipho Ngwema, head of communications at the Competition Commission, said the big four retailers were expected to present submissions at the public hearings in July.
The next round of hearings is expected to take place in KwaZulu-Natal from July 3 to July 7.
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