South Africa is seeing a big shift in shopper loyalty, says Amelia Beattie, the chief executive of Libert Two Degrees (L2D), with Woolworths shoppers now happy to do some of their shopping at Shoprite-owned Checkers as it gains prominence in more affluent markets.<\/p>\n
According to Beattie, L2D – which has holdings in high-LSM markets like Sandton City – is noticing an emerging trend of ‘hybrid loyalty’ in South Africa.<\/p>\n
South Africans who used to strictly shop at one particular store, such as Woolworths, are now shifting to other incorporating other stores, such as Checkers, for certain goods.<\/p>\n
“We see a shift with Checkers now catering for both shoppers – affluent and others – giving rise to a hybrid persona as people buy certain goods at Woolies and some at Checkers,” she said.<\/p>\n
While the trend has something to do with shoppers having more options in the same market, the current economic conditions in South Africa are also a big factor.<\/p>\n
Inflation is adding pressure on consumers’ ability to spend, said Beattie, as incomes are impacted by rising food and transport costs, escalating fuel costs, the increasing price of electricity and the negative impact of load shedding.<\/p>\n
Retail analysts and behavioural economists now point to inflation as a significant cause for people starting to trade up or down in their grocery shopping.<\/p>\n
There is now far less brand loyalty, and online delivery services during lockdown introduced people to a more hybrid persona.<\/p>\n
Despite the current economic challenges, the top five retail categories driving this improved performance include apparel at 24.8% ahead of the 2021 period; department stores at 17%; food service at 41.8%; luxury brands at 34.3%; and health, beauty and wellness at 37.4%, said Beattie.<\/p>\n
When it comes to luxury goods, many people are adopting the principle of ”you only live once” (YOLO), said retail trends analyst Dion Chang. “We call it a ‘life audit’ – basically, where people have processed things and have decided to live more at the moment, leading to spending more on things.”<\/p>\n
Checkers has been on an active drive to improve store layout and provide more specialised products.<\/p>\n
From the start of this year, retailer Shoprite said that it wants to position Checkers in the mid-to-upper market. The group has also spent and allocated more capital to the expansion of its store portfolio.<\/p>\n
In March of this year, the CEO of Checker’s, Pieter Engelbrecht<\/strong><\/a>, said that growth for the group would be underscored by its leadership in low-price business, but the focus will also be aimed at growing Checker’s position into the higher LSM market.<\/p>\n The retail giant has been making a shift into the beauty, pet and health segments.<\/p>\n Woolworths now has some competition in the premium space. Both Checkers and Pick n Pay have invested in their own premium brand offerings. In 2021, the Shoprite-owned brand launched Feast and Forage, a premium range including things such as specialised cheeses, oils, teas and homestyle goods.<\/p>\n Luxury food shootout: Woolworths vs Pick n Pay vs Checkers<\/a><\/p><\/blockquote>\n