Shoprite eyeing Woolies market

While lower-income families who have long been Shoprite’s core customers cut back, the wealthier class’s spending remains undented by the downturn.

In a bid to retain its leading industry position, the discount retailer’s new boss is driving hard into the upmarket, higher-margin niche dominated by Woolworths.

Shoprite CEO Pieter Engelbrecht says affluent areas and customers are where he sees growth in the maturing SA market.

“A lot of those [wealthier] customers, 2 million of them, actually frequent our stores already, but not exclusively,” he said. “Our job is to get a better share of their wallets when they are in our stores and then impress them so that they come back again.”

Affluent areas and customers are where I see growth in the maturing SA market.

Shoprite is doubling its offering of the kind of high-end convenience foods that Woolworths has built its reputation on. Its range will reach around 500 products by the end of this year, Engelbrecht said.

These products typically cost about R200 for a meal for four – 10 times the minimum wage of R20 an hour as set by new labour laws making their way through Parliament.

As part of the drive to expand its range, Engelbrecht said Shoprite had upgraded its food technology and development facilities and gone on a hiring spree for food developers and technologists. He said the department had grown 10-fold in a year.

Shoprite’s executing this strategic shift by expanding its higher-end Checkers chain of stores.

It plans to open 23 new outlets, mostly in wealthy suburbs such as Waterfall City north of Johannesburg, by June next year to bring the number of stores to about 230 –

Pieter Engelbrecht Shoprite CEO