Woolworths also expanded<\/a> its presence, increasing its Woolworths Food locations to 651 across Southern Africa, up from 479 in 2023, with 430<\/a> of these stores located within South Africa.<\/p>\n\n\n\n However, not all of South Africa\u2019s retailers performed well this year.<\/p>\n\n\n\n Last week, Pick n Pay, which operates both Pick n Pay and Boxer stores, released a trading update<\/a> for the 26 weeks ending 25 August 2024.<\/p>\n\n\n\n It revealed that while Boxer grew sales by 12% and opened twelve new stores, Pick n Pay\u2019s performance lagged, with sales decreasing by 0.3% overall and only a 0.1% increase in Pick n Pay South Africa\u2019s sales.<\/p>\n\n\n\n This decline is partly due to the closure of 24 supermarkets, including 10 corporate and 14 franchise stores, as part of a turnaround strategy aimed at shutting down loss-making stores.<\/p>\n\n\n\n CEO Sean Summers previously announced plans to close 35 underperforming stores and convert 70 outlets to the Boxer brand.<\/p>\n\n\n\n The South African retail environment has been changing for the last several years, and the stores that have been able to keep pace with changing trends, like Checkers, have reaped the rewards.<\/p>\n\n\n\n An increasing number of shoppers are relying on grocery delivery services, and preferring smaller, more convenient stores above large, \u201chyper\u201d stores. <\/p>\n\n\n\n While Woolworths always dominated the upmarket grocery space in South Africa, retailers like Checkers and Pick n Pay have introduced their own premium ranges in the last few years.<\/p>\n\n\n\n Andrea Slabber, Insights Lead at Trade Intelligence, explained some of the key trends in South Africa\u2019s grocery sector on the Kaya Biz<\/a> podcast. <\/p>\n\n\n\n Even though 378 net new stores opened over the past half year in South Africa\u2019s six major grocery retail companies, she said that this doesn\u2019t necessarily translate to real growth. <\/p>\n\n\n\n \u201cIf you look at over the past five years, there’s been an average of one new store opening per day, seven days a week for the whole year, which really sounds staggering. And it is.\u201d<\/p>\n\n\n\n \u201cIt also sounds puzzling, because where is this growth going on?\u201d<\/p>\n\n\n\n \u201cIf you look at the numbers, there’s not that much real growth. It’s cropped by inflation.\u201d<\/p>\n\n\n\n Slabber explained that there are two important trends in the FMCG industry at the moment. <\/p>\n\n\n\n First, there have been quite a few acquisitions of stores that were previously situated in the wholesale and independent retail space. <\/p>\n\n\n\n The Shoprite Group, in particular, has seen its store growth boosted by this strategy. <\/p>\n\n\n\n \u201cSo, it’s displacing the market share, I suppose, from one channel to another.\u201d<\/p>\n\n\n\n \u201cThe other trend is most of the stores that the retailers open are smaller, more convenience-focused stores.\u201d<\/p>\n\n\n\n \u201cAnd they’ve also intentionally reduced the size of their very large and their hyper supermarkets.\u201d<\/p>\n\n\n\n As a result, Slabber explained that there is currently a \u201cfragmentation of the trade\u201d. <\/p>\n\n\n\n \u201cThe actual growth isn’t really as big as the number of the stores increasing exactly.\u201d<\/p>\n\n\n\n This means that while there may be more stores, the measurable trading isn’t growing much.<\/p>\n\n\n\n She added that the competition in the FMCG (Fast-Moving Consumer Goods) industry is incredibly fierce.<\/p>\n\n\n\n![\"\"](\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2021\/02\/Checkers-2-1024x682.jpg\")
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