Woolworths Food under siege

Checkers and Spar are rolling out high-end grocery stores, targeting a market segment Woolworths Food dominated for years.

On 5 March 2025, Woolworths released its interim financial results for the 26 weeks that ended on 29 December 2025.

The retailer’s turnover grew by 5.4% to R39.6 billion, supported by a strong performance in its South African food business.

The company’s operating profit from core trading activities fell by 13.3%, but its profit grew by 20.9% to R2.2 billion.

Woolworths’s food business reported a strong performance, with 11.4% turnover growth and an improved gross profit margin of 24.9%.

Woolworths Food grew revenue for the six months from R22.4 billion to R25.0 billion, which is exceptional in the local market.

In addition, the retailer’s on-demand grocery delivery service, Woolies Dash, saw sales increase by 49.2%, and total online food sales rose by 37.2%.

Woolworths Food is the feather in the retailer’s cap. It is the growth engine for the company and has a dominant position in South Africa’s high-end grocery market.

The company said Woolworths Food’s strong performance was driven by positive underlying volume growth.

This volume growth was bolstered by improved availability, ongoing innovation, and the company’s enhanced value proposition.

More targeted and effective promotions and chain efficiencies drove the higher gross profit of the food business.

These factors offset the impact of a growing online channel and the ongoing investment in the company’s value proposition.

Woolworths Food’s exceptional performance over the years has attracted the attention of other food retailers, including Checkers and Spar.

These retailers actively target Woolworths’s food business through services aimed at affluent South African consumers.

This retail battle is fought on many fronts, including high-end brick-and-mortar stores and online grocery deliveries.

Checkers stealing Woolworths Food customers

Checkers is gaining market share from Woolworths Food through its superior offerings and Sixty60 grocery service.

According to Shoprite’s financial reporting, Checkers is South Africa’s fastest-growing retailer in the premium food segment.

Checkers and Checkers Hyper increased their sales by 13.6% to R47.6 billion, constituting slightly less than half of the segment’s total sales.

Checkers has been winning market share from Woolworths Food in the premium food segment for years.

Since 2019, Checkers’ market share has increased from 57% to 62%, while Woolworths Food’s market share has dropped from 43% to 38%.

Sixty60 drives part of Checkers’ success in the premium food segment. The grocery delivery app has gained strong adoption across South Africa.

Shoprite’s results for the 26 weeks through December 2024 showed that Checkers Sixty60 increased sales by 47.1% and expanded to 601 stores.

It is not only Checkers Sixty60 that is eating Woolworth’s lunch. The retailer is also investing heavily in high-end brick-and-mortar stores.

Over the past decade, Shoprite has focused on capturing a larger share of the wealthy market segment in South Africa.

It used its Checkers, and lately, the revamped Checkers FreshX stores, to target richer South Africans through high-end products.

Increasingly, Checkers competes with Woolworths Food by delivering similar quality goods at lower prices.

Spar Gourmet stores strategy

Last week, Spar Southern Africa chief executive Max Oliva revealed that the company will roll out 30 to 40 high-end grocery stores.

The first high-end Spar store, which targets affluent shoppers, is set to open in the fourth quarter of 2025.

The new Spar Gourmet stores will target South Africans in the 7 to 10 Socio-economic Measures (SEM).

This group is defined as having high access to resources, infrastructure, and amenities. Simply put, these are wealthy South Africans.

Oliva said the retailer is looking at sites in high-end residential and urban neighbourhoods to access this market.

Spar wants to give South Africans a reason to shop by offering high-end products through key strategic partnerships.

The new Spar Gourmet stores will offer a standardised design and brand philosophy, which the group anticipates will allow for a high-margin retail model.

Through the Private Label Spar Signature Selection range and strategic supplier partners, it will offer differentiated product ranges and bespoke offerings.

It will offer a fresh arena implementation and a product range and assortment specifically targeting wealthy South Africans.

Oliva said Spar’s Private Label Spar Signature Selection will play a big role in the new Gourmet stores strategy.