SHOPRITE GROUP: A Future-Fit Force for Good

Since the opening of its first stores in 1979, Shoprite Holdings has maintained the same bold vision for the future, which has enabled it to become the dominant food retailer today in South Africa and further afield, into nine other African countries. “Over the past 40 years,” Shoprite underlines, “we’ve proved our resilience and value by creating brand trust, recognition and goodwill in the countries where we operate.

“With more than 3,152 stores across Africa and over 152,000 employees, we will strive to seize new opportunities for growth in the years to come.”

Shoprite pinpoints an unmatched ability to leverage an invaluable leadership position in South African food retail, alongside heavy investment into digital transformation initiatives, as having been pivotal to unlocking additional ecosystem opportunities to date to keep the business fully future-fit. “We believe that by remaining focused on optimising our business in its core South African market and investing in ecosystem adjacencies that are of value to our customers,” Shoprite then furthers, “we will unlock significant opportunities to grow our business and carve out complementary revenue opportunities in the future.”

PIVOTAL PILLARS

Underpinned by nine strategic drivers that furnish Shoprite with its framework for growth, while ensuring the business remains relevant within its existing operating context and from a best-in-class global retail perspective, are three strategic pillars: A Smarter Shoprite, Closing the gap in key segments and Winning in the long term. The first entails smarter decisions, fewer mistakes and being truly optimised for customers, with future-fit channels enabling precision retailing.

“We then focus on closing the opportunity gaps in areas where we have headroom for revenue growth,” Shoprite unpacks, “with trusted, profitable private labels, by growing our share in premium and fresh food and building a stronger franchise offering. In the long term, technology will amplify our ability to continue providing operational excellence and outstanding customer experiences.” In doing so, Shoprite aims additionally to unlock alternative revenue, source future-fit talent and leverage a considerable platform advantage.

“Customer-centric decision-making is driving our leadership in retail,” Shoprite delineates in more detail. “It keeps us focused on what our customers want in our core business activities. Customer data powers decision-making at all levels of the organisation and drives continuous improvement. Customer insight is improving our business processes and helping our supplier partners improve our products and services to benefit our customers more rapidly than ever before.”

To close those all-important opportunity gaps, Shoprite will continue to make use of its sheer scale and size to afford access to trusted, profitable private labels. “Our scale allows us to build a meaningful private-label brand portfolio and supply chain,” it clarifies. “We develop and distribute products more efficiently, offering unrivalled choice and affordability, creating win-win partnerships with suppliers.

“We have established leadership positions in both our value and premium tier private-label brands, while our franchise brands offer entrepreneurs in South Africa and neighbouring countries access to a franchise proposition, which leverages the Group’s buying power and supply chain capabilities.”

To secure continued victories and success over many more years to come, a platform of just short of 25 million engaged customers in South Africa, combined with investment in digital commerce presents huge opportunity to unlock alternative revenue in the digital and services space. “Customer data powers the design of products that customers love and allows us to make better, more affordable options available to customers through new adjacent verticals.

“Emerging retail technology trends and rapidly changing consumer expectations require talent that is skilled in new digital technologies,” Shoprite identifies. “Experienced data and technology talent is in high demand and we have made great inroads into new and agile ways of working to ensure we achieve fit-for-the-times outcomes.

“Our retail teams are at the centre of a changing in-store customer environment and are equipped for the demands of new retail.”

TRANSFORMATION JOURNEY

The upshot of this multi-year strategic transformation journey has been results and performances which, without exception, serve to set the Group apart from the crowd. In the 2022 Deloitte Global Powers of Retailing survey, Shoprite Holdings was listed as the largest retailer in the Africa and Middle East region, while rising seven places to the 100th position in the global rankings. Sales followed suit for the 52 weeks to July 2022, increasing by 9.6% to R184.1 billion producing a gross profit of R45.1 billion.

There has been significant progress against aspects of the Shoprite strategy, too. It has achieved a 75% share of the grocery delivery market since launching from eight stores in November 2019. 1,285 new products were launched in 2022 across the full range of its private labels compared to 717 in the year preceding, while it inaugurated both Petshop Science and Little Me, ended the year with 22 stores and one store at year end respectively, and a further at year end, 19 and 10 planned for 2023.

“Our multi-year strategic transformation journey has delivered 40 months of consecutive market share gains while closing gaps we had identified in key segments,” outlined Pieter Engelbrecht, Shoprite CEO. “The initiatives underpinning our commitment to unlock alternative revenue streams are beginning to reflect positively on our returns and profitability.” 

2022 was probably the most challenging year Shoprite has ever faced from an external environment perspective; only customary expert planning, exceptional teamwork and seamless execution on all fronts enabled it to achieve its primary objective of bringing customers food at the best prices possible while extending its position as market leaders.

We are now positioned to amplify our platform advantage with unrivalled customer scale, store footprint and data,” Englebrecht assessed. “We continue to work on creating a Smarter Shoprite and using our leadership position as a ‘force for good’. We are further embracing digital opportunities and enhancing our operational capabilities. While we believe we can still achieve organic growth in our core markets, we will continue to close the gap in the growth segments in which we are under- represented.

“We are first and foremost authentically customer-centric, guided by low prices and range in Shoprite, which dovetails with Usave to offer our core mid-to-lower segment customers value and accessibility, and choice, extended fresh offer and value in Checkers. Coupled with this is our desire to improve our customers’ experience across all our brands and, in this regard, our strategic road map is completely aligned with our purpose: to uplift lives every day by pioneering access to the most affordable goods and services, creating economic opportunity, and protecting our planet.”