South Africa’s biggest food retail chains have experienced massive growth in sales, despite economic hard times hitting the country.
Last week, Woolworths Holdings reported a climb in retail sales by over 45% for the year to June, totaling R58 billion.
Even though Woolies’ results are not exclusively related to its food segment, this growth is bucking the trend in the country – where consumers have been hit hard by rising prices in almost every sector of the economy.
By all measures, South Africa’s other big retail groups are seeing similar success, though not quite as large as Woolies.
Shoprite Holdings managed to boost sales by 11.2%, taking its total to just under R114 billion for the year ended June 2015, while Spar’s interim results saw retail turnover grow 9.3% in the first six months of the year.
Pick n Pay saw the most muted growth in sales, growing retail turnover 6.1% to R66.9 billion in its latest financial year.
Price and reputation
Woolworths has a reputation for being the most expensive retailer in the country, while Checkers is seen as a more affordable option. On a level playing field, however, it’s difficult to see where all the shops fit in on the price scale.
BusinessTech visited stores from each of the big four retailers in Gauteng, looking at a basket of 15 items that you would typically find in a weekly or monthly trip to the store – including basics such as bread, milk, and eggs.
Where possible, store brands were used in the pricing – where a store brand was not available, the cheapest brand on sale was used.
It must be noted that the prices below are only applicable to Gauteng and other inland areas. Coastal pricing may differ.
|Product||Description||Woolworths||Pick n Pay||Spar||Checkers|
|Bread||Brown, one loaf||R11.95||R6.50||R7.99||R8.99|
|Cheese||Cheddar, per kg||R97.95||R123.33||R89.99||R94.90|
|Chicken||Assorted, per kg||R49.99||R36.00||R46.99||R39.99|
|Coca Cola||2 litres||R15.95||R13.50||R15.99||R12.99|
|Milk||Full cream, 2 litres||R27.95||R22.79||R25.99||R22.79|
|Mince||Lean, per kg||R79.99||R84.99||R76.99||R62.99|
Woolworths has a reputation for being South Africa’s most expensive store for groceries – and the title is well-earned.
However, all stores have different price premiums – depending on what you’re buying.
Woolworths gets its title as the most expensive food store in the country largely through the sale of its ‘premium products’ – premium brands, ready-made meals, and pre-cut and packaged meat and vegetables.
Checkers worked out to be the cheapest, but not always: the store still managed to hit over R400 in total, and was only around R60 cheaper than Woolies.
Woolworths came out as most expensive in nine of the 15 product groups, Spar priced highest in three groups, Pick n Pay in two, and Checkers in one. There was a large difference in the cheese category, which pushed PnP up as the second-most expensive.
Overall, when it comes to buying the basics, you’re not going to be paying that much more at Woolies than at other stores.
[Update] – Meaty issue
In feedback from readers and retailers, the argument has been made that bulk (per/kg) items are not reflective of an ‘average’ basket of goods consumers would buy.
The per kilogram measure was chosen to level the playing field between retailers, as the packaged meat, cheese and chicken products come in various sizes, making it difficult to compare like for like.
However it’s been noted that this category has many various products at different weights coming in at very different per/kg price points.
Due to this discrepancy, BusinessTech has included another infographic showing the basket of goods minus all per/kg items.