Khula Retail Business Plan › Section 5 › Market Analysis & Customer Segmentation

5.1 Catchment Analysis

The Khula Market trade area has been defined as the set of households
whose primary daily-essentials shopping trip can be completed within a
10-minute drive or 20-minute walk of the proposed store location. Based
on geo-spatial analysis using publicly available Stats SA enumeration
data, refined by direct on-site observation, the catchment
comprises:

• Approximately 24 600 households within a 2 km primary
  radius.
• A resident population of approximately 91 000 individuals across
  the primary catchment.
• An additional 8 800 households within the 3 km secondary
  catchment that are reachable but face moderate inter-store
  competition.
• A working population of approximately 11 200 commuters passing
  through the catchment on a typical weekday — a meaningful daytime
  opportunity not captured by household analysis alone.
• Average household income skew toward LSM 5–8 (representing
  approximately 70% of the catchment), with a meaningful tail in LSM 8–10
  (15%) and LSM 1–4 (15%).

5.2 Total Addressable, Serviceable and Obtainable Market

The Company has framed the market opportunity using a conventional
TAM-SAM-SOM hierarchy, conservatively calibrated to the Gauteng general
dealer segment and the specific catchment characteristics summarised
above.

Table 11. TAM-SAM-SOM market sizing

The Year-5 forecast represents capture of approximately 24% of the
SOM — a level the team considers credibly achievable given catchment
density, competitor weakness within the immediate trade area and the
operating disciplines described in Sections 7 and 8.

5.3 Customer Segmentation

Three primary customer segments have been identified within the Khula
Market catchment, each with distinct shopping behaviours, basket
compositions and engagement preferences. The segmentation framework has
been validated through a pilot survey of 412 catchment residents
conducted in late 2025.

Figure 5.

5.3.1 Segment A: “The Daily Topper-Upper”

Estimated 45% of Year 1 revenue. This segment shops 4–6 times per
week for top-up needs, with average basket value of R110–R140.
Behavioural drivers are convenience, dependable in-stock availability of
daily essentials (bread, milk, eggs, basic vegetables) and the absence
of long queues. This segment is highly responsive to consistency: a
single repeated stock-out experience can permanently lose the customer
to a competitor.

5.3.2 Segment B: “The Weekly Provisioner”

Estimated 35% of Year 1 revenue. This segment conducts a longer
weekly shopping trip (typically Saturday morning) with average basket
value of R650–R900. Drivers are price perception across a defined basket
of essentials, range adequacy across categories (so that a single trip
is sufficient) and promotional offers on family-pack sizes. This segment
is the natural customer for the Khula Plus loyalty programme and a
primary target for category-bundle promotions.

5.3.3 Segment C: “The Discretionary / Treat Buyer”

Estimated 20% of Year 1 revenue. This segment over-indexes in
personal care, bakery, deli and selected premium grocery items, with
average basket value of R220–R380 and irregular shopping cadence.
Drivers are product quality, in-store ambience and the dignity of being
well-served. While numerically smaller, this segment is
disproportionately important to gross-margin contribution and to the
store’s brand positioning.

Table 12. Customer segment economics — Year 1

5.4 Voice of Customer — Pilot Survey Findings

The Company commissioned a structured catchment survey of 412
residents in November 2025. The survey instrument was designed in
consultation with a market research advisor and administered
face-to-face at three locations within the catchment over a 14-day
period. Key findings:

• 87% of respondents indicated dissatisfaction with the closest
  existing supermarket on at least one of: queue length, fresh-produce
  range, or stock-out frequency.
• 64% reported travelling outside the catchment at least monthly to
  shop at a larger supermarket — representing approximately R32 million in
  annual spend leakage from the catchment.
• 78% expressed strong interest in a community-format store
  offering a curated assortment, fast checkout and integrated bill-payment
  services.
• The most-cited unmet needs were (in order): (i) reliably stocked
  fresh produce; (ii) hot bakery products in the morning; (iii)
  bill-payment integration; (iv) cash-back at the till; and (v) an
  in-store ATM or banking point.
• Only 23% reported using any form of supermarket loyalty programme
  — suggesting meaningful headroom for a well-designed programme.

5.5 Demand Forecast Methodology

Year 1 revenue has been forecast bottom-up using a population ×
penetration × visit-frequency × basket-value model, calibrated against
benchmarked store-productivity data from comparable independent
operators.

Table 13. Year-1 revenue build (bottom-up demand model)

Years 2 to 5 incorporate (a) same-store sales growth derived from
loyalty embedment, range optimisation and price discipline, (b)
new-store openings as scheduled in the implementation roadmap, and (c)
modest like-for-like inflation pass-through. The full progression is
detailed in Section 11.

Confidential — this business plan is provided to prospective investors and lenders for evaluation purposes only and may not be reproduced or distributed without the written consent of Khula Retail (Pty) Ltd.