South African grocery retailers shoot the lights out

The South African fast-moving consumer goods (FMCG) retail sector demonstrated resilience and impressive growth in 2024 thanks to strategic expansion and diversification of offerings.

This is according to the latest Corporate Retail Comparative Report by retail research company Trade Intelligence.

The report analyses the performance metrics of the country’s six listed FMCG retailers: Shoprite, SPAR, Pick n Pay, Woolworths, Clicks, and Dis-Chem Pharmacies.

“If 2024 taught us anything, it’s that the South African FMCG corporate retail sector knows how to keep moving forward, even when the playing field keeps shifting,” said Trade Intelligence.

Overall, FMCG corporate retailers expanded significantly across South Africa and Africa, opening over 10,000 stores in the past five years.

This growth represents a 24.2% increase in store footprint, with the expansion including non-grocery categories such as pet, baby, and clothing.

The group noted that food inflation eased in the second half of 2024 after experiencing significant increases in 2022 and 2023 (+9.2% and +10.8%).

The moderation in inflation supported volume growth, with Shoprite Supermarkets RSA, Clicks, and Boxer all recording positive performance.

Carey Leighton, Trade Intelligence’s economist and retail analyst, said Woolworths Food and SPAR Retail Grocery showed improvements but remained in negative territory.

“Leaders are making big decisions and executing strategies for growth – backed by R15.7 billion in planned CAPEX for FY2025 and bringing along over 330,000 employees – shaping not just their businesses but the future of FMCG,” he said.

Shoprite Group continued its impressive performance as the market leader, achieving the highest turnover of R241 billion, marking a growth of 12% for FY2024.

Specifically, the report notes that Checkers outperformed Woolworths Food for the fifth consecutive year, driven by strategic store expansions and the success of the Sixty60 delivery service.

Woolworths’ full-year results for the 2024 financial period revealed that its turnover increased by only 4.3%, from R72.3 billion to R76.5 billion.

Discounters in the spotlight

The appetite for discount retailers in South Africa is gaining significant traction as consumers continue to look for ways to save in a challenging economy.

This was one of the key findings in McKinsey & Company’s 2024 State of Grocery Retail in South Africa report.

It outlined that the country’s grocery market shows early signs of recovery in 2024 after facing sustained pressure for several years.

There is “a persistent emphasis on cost-conscious shopping, highlighting an evolving retail landscape that is adapting to meet the needs of budget-savvy shoppers,” said McKinsey & Company.

According to the report, 76% of shoppers are more inclined to purchase products on promotion, and 63% have switched to store brands to manage their budgets effectively.

According to the Trade Intelligence report, Boxer saw the highest turnover growth among grocery retailers for the second year in a row, following its debut on the Johannesburg Stock Exchange (JSE) in November 2024.

It said that this success positions Boxer for further expansion.

Additionally, Shoprite plans to double its Usave store footprint to 1,000 locations over the next five years, while SPAR is revitalising its SaveMor format.

These developments signal growing consumer interest in the discount retail segment.

Trade Intelligence said that the sector is set for continued expansion, with R15.7 billion in planned capital expenditures for FY2025.

These investments will focus on store growth, IT infrastructure, and sustainability initiatives.

The continued growth of over 330,000 employees reflects the sector’s commitment to long-term development and its vital role in shaping the future of the FMCG industry.