University of the Witwatersrand, Johannesburg
BUSE2026/2030
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Paper Number and title
RETAIL MANAGEMENT
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SECOND YEAR
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BCom, BA
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Internal examiner(s) and telephone
and extension number(s)
FACULTY OF COMMERCE LAW &
MANAGEMENT
DR MELISSA ZULU
PROF MARIKE VENTER
External examiners
DR MTHOBISI NHLABATHI
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Course No
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BUSE2026/2030
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RETAIL MANAGEMENT (BUSE2026/2030)
DEFFERED EXAM
Duration of the examination
Section A – Case Study
Section B – Short questions
Total Marks
: 2 hours
Allocation of Marks
50
25
75
Instructions:
1. Section A: Answer ALL questions.
2. Section B: Answer ALL questions.
3. Begin each section on a SEPARATE page.
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SECTION A: CASE STUDY (50 MARKS)
Questions in this section are based on the ‘Strategic Expansion into Rural Retail
Markets” case study.
Strategic Expansion into Rural Retail Markets
Introduction:
In the ever-evolving landscape of retail management, Vukile Property Fund has emerged as a
noteworthy player by adopting a unique growth strategy focused on rural and township retail
markets. This case study explores Vukile's strategic venture into the Eastern Cape, particularly
in Mthatha. This bold move is driven by data indicating robust economic activity in these
markets, contrary to prevailing economic expectations.
Investing in Mthatha:
Vukile's expansion strategy recently materialised by acquiring a shopping centre in Mthatha,
Eastern Cape – with a population size that continues to grow. The project involves a significant
investment of R800 million, with Vukile purchasing 50% of the mall and contributing R400
million. An additional R150 million will be allocated to upgrade the mall, demonstrating their
commitment to enhancing the retail experience in the region.
Market resilience:
Vukile's decision to focus on rural and township shopping centres is underpinned by their
recognition of the remarkable resilience of these markets. Key factors contributing to this
resilience include:
1. Township areas boast higher population densities, creating a consistent flow of foot traffic
into shopping centres.
2. Despite challenging macroeconomic conditions, these markets continue to thrive due to a
robust cash economy.
3. Shopping centres in rural and township locations have evolved into vital hubs, offering
essential services such as banking, pharmaceutical care, and grocery shopping.
4. While Vukile aims to intercept consumers effectively, they also consider cost considerations.
For example, they recognise that choosing a more accessible location, such as at the
intersection of major streets, taxi ranks and informal markets, is essential.
5. The types of anchor clients that Vumile attracted already have a strong brand presence;
therefore, attracting customers through their marketing efforts should be an advantage. These
retailers want to be in an accessible location to maximise profitability. With the R150 million
allocated to upgrading the mall, Vukile will create more retail space for shops selling similar
items and complementary stores (books, electronics, coffee shops). For example, Vukile
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understands that similar shops together will draw more business than apart, especially when
targeting such a diverse customer base.
Value extraction strategy:
Vukile has successfully leveraged its retail properties by strategically positioning them as
dominant assets within widespread trade areas. This approach encourages not only essential
purchases but also discretionary spending by shoppers. Consumers' aspiration for branded
products further contributes to the profitability of these centres.
Data-driven decision-making:
Vukile's retail management approach is heavily reliant on data-driven insights. Itumeleng
Mothibeli, Vukile's Southern Africa Managing Director, emphasises the importance of
monitoring shifting shopper patterns. This data-driven approach allows Vukile to respond
promptly to evolving consumer preferences and market dynamics.
Conclusion:
Vukile Property Fund's venture into rural and township retail markets, exemplified by its
investment in Mthatha, Eastern Cape, showcases an innovative and successful approach to retail
management. By recognising the inherent strengths of these markets, strategically positioning
their assets, and employing data-driven decision-making, Vukile has demonstrated resilience and
profitability in a challenging economic environment. This is a testament to the potential for
growth and success in unconventional retail markets when approached with a strategic mindset.
Source: adapted from: Matshoba, A. (2023). Vukile targets growth in rural retail.
https://www.moneyweb.co.za/news/companies-and-deals/vukile-targets-growth-in-rural-retail/
Question 1
Regardless of whether a retailer intends to change their location, initiate a new business
venture, or establish an additional store, there are fundamental principles that must
consistently be followed. Based on the “Strategic Expansion into Rural Retail Markets”
case study, apply the relevant principles of retail location in the context of Vukile
Property Fund’s venture.
(5x2=10 marks)
Question 2
In the context of Vukile Property Fund's expansion into rural and township retail
markets, analyse the potential macroeconomic factors that could impact the success of
their venture.
(6x2=12 marks)
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Question 3
Advise Vukile Property on at least four (4) controllable elements they can use in
shaping the total retail experience as they upgrade the mall.
(4 marks)
Question 4
Considering the importance of monitoring shifting shopper patterns, as emphasised by
Vukile Property Fund's Managing Director:
4.1 Discuss how traditional brick-and-mortar retailers in rural and township areas can
use key drivers of online shopping to compete effectively with online retailers.
(7x2=14 marks)
4.2 The rise of online shopping has prompted extensive research into consumers who
make online purchases. Advise traditional brick-and-mortar retailers in rural and
township areas on the five (5) types of online shoppers they must consider in their datadriven insights.
(5x2=10 marks)
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SECTION B: SHORT QUESTIONS (25 MARKS)
Question 1
The retail industry is highly competitive, and retailers must consistently work on
mitigating customer churn. Keeping existing customers is cheaper than acquiring new
ones. Therefore, maintaining a high customer lifetime value (CLV) is at the heart of
every business’s success. With this in mind, you are required to advise a small
independent retailer on the following:
1.1 Explain the concept of CLV.
(5 marks)
1.2 In the context of customer relationship management (CRM), discuss why CLV is
considered the central component.
(5x2=10 marks)
1.3 Recommend to the small independent retailer at least five (5) strategies to improve
CLV.
(5x2=10 marks)
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