“In the South African context, it’s actually quite expensive,” said Unathi Loos, retail analyst at Investec Asset Management in Cape Town. “It’s fallen into a completely different category here than it has abroad.”
However, Ms. Loos doesn’t fear the same fate for Starbucks. “There’s quite a coffee culture that is developed in South Africa. People are willing to part with a good amount of money for a good cup of coffee.”
South Africa was historically under-penetrated by international brands, which avoided the country due to international sanctions during apartheid rule, which ended in 1994. But recent decades have seen an influx of investment into the country’s major cities, which draw well-to-do shoppers from elsewhere on the continent because of well-developed roads and a comparatively wide range of retailers, from mass-discount stores to high-end international brands.