Non-metropolitan areas in Southern Africa have in recent years become target markets for big retailers. Before the establishment of malls in non-metropolitan areas, consumers relied on informal traders and stores in their nearest CBDs, but the establishment of retail centres in non-metropolitan areas has changed this behavior. The opening of more stores increases retailer operating costs with possibly no increase in profit or market share. The phenomenon of new stores gaining market share at the expense of existing stores, is known as retail cannibalisation. The purpose of this paper is not only to explore the impact of retail cannibalisation in Maseru, Lesotho, but to also understand the determinants of retail cannibalisation. Qualitative research based on secondary data was conducted in order to analyse the impact and extent of retail cannibalisation in non-metropolitan areas with specific reference to Maseru, the capital and largest city of Lesotho. This phase was followed by interviews of thirteen retail managers operating more than one store in Maseru. The research indicated that retail cannibalisation is an inevitable result of retail expansion, although the levels of cannibalisation differ. In certain cases cannibalisation may result in retailers being forced to close one or more of its stores.

Username
Password