{"id":817132,"date":"2025-03-17T12:30:00","date_gmt":"2025-03-17T10:30:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=817132"},"modified":"2025-03-17T12:25:43","modified_gmt":"2025-03-17T10:25:43","slug":"woolworths-food-under-siege","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business\/817132\/woolworths-food-under-siege\/","title":{"rendered":"Woolworths Food under siege"},"content":{"rendered":"\n

Checkers and Spar are rolling out high-end grocery stores, targeting a market segment Woolworths Food dominated for years.<\/p>\n\n\n\n

On 5 March 2025, Woolworths released its interim financial results for the 26 weeks that ended on 29 December 2025.<\/p>\n\n\n\n

The retailer\u2019s turnover grew by 5.4% to R39.6 billion, supported by a strong performance in its South African food business.<\/p>\n\n\n\n

The company\u2019s operating profit from core trading activities fell by 13.3%, but its profit grew by 20.9% to R2.2 billion.<\/p>\n\n\n\n

Woolworths\u2019s food business reported a strong performance, with 11.4% turnover growth and an improved gross profit margin of 24.9%.<\/p>\n\n\n\n

Woolworths Food grew revenue for the six months from R22.4 billion to R25.0 billion, which is exceptional in the local market.<\/p>\n\n\n\n

In addition, the retailer\u2019s on-demand grocery delivery service, Woolies Dash, saw sales increase by 49.2%, and total online food sales rose by 37.2%.<\/p>\n\n\n\n

Woolworths Food is the feather in the retailer\u2019s cap. It is the growth engine for the company and has a dominant position in South Africa\u2019s high-end grocery market.<\/p>\n\n\n\n

The company said Woolworths Food\u2019s strong performance was driven by positive underlying volume growth.<\/p>\n\n\n\n

This volume growth was bolstered by improved availability, ongoing innovation, and the company\u2019s enhanced value proposition.<\/p>\n\n\n\n

More targeted and effective promotions and chain efficiencies drove the higher gross profit of the food business.<\/p>\n\n\n\n

These factors offset the impact of a growing online channel and the ongoing investment in the company\u2019s value proposition.<\/p>\n\n\n\n

Woolworths Food\u2019s exceptional performance over the years has attracted the attention of other food retailers, including Checkers and Spar.<\/p>\n\n\n\n

These retailers actively target Woolworths\u2019s food business through services aimed at affluent South African consumers.<\/p>\n\n\n\n

This retail battle is fought on many fronts, including high-end brick-and-mortar stores and online grocery deliveries.<\/p>\n\n\n\n

Checkers stealing Woolworths Food customers<\/strong><\/h2>\n\n\n\n
\"\"<\/a><\/figure>\n\n\n\n

Checkers is gaining market share from Woolworths Food through its superior offerings and Sixty60 grocery service.<\/p>\n\n\n\n

According to Shoprite\u2019s financial reporting, Checkers is South Africa\u2019s fastest-growing retailer in the premium food segment.<\/p>\n\n\n\n

Checkers and Checkers Hyper increased their sales by 13.6% to R47.6 billion, constituting slightly less than half of the segment\u2019s total sales.<\/p>\n\n\n\n

Checkers has been winning market share from Woolworths Food in the premium food segment for years.<\/p>\n\n\n\n

Since 2019, Checkers\u2019 market share has increased from 57% to 62%, while Woolworths Food\u2019s market share has dropped from 43% to 38%.<\/p>\n\n\n\n

Sixty60 drives part of Checkers\u2019 success in the premium food segment. The grocery delivery app has gained strong adoption across South Africa.<\/p>\n\n\n\n

Shoprite\u2019s results for the 26 weeks through December 2024 showed that Checkers Sixty60 increased sales by 47.1% and expanded to 601 stores.<\/p>\n\n\n\n

It is not only Checkers Sixty60 that is eating Woolworth\u2019s lunch. The retailer is also investing heavily in high-end brick-and-mortar stores.<\/p>\n\n\n\n

Over the past decade, Shoprite has focused on capturing a larger share of the wealthy market segment in South Africa.<\/p>\n\n\n\n

It used its Checkers, and lately, the revamped Checkers FreshX stores, to target richer South Africans through high-end products.<\/p>\n\n\n\n

Increasingly, Checkers competes with Woolworths Food by delivering similar quality goods at lower prices.<\/p>\n\n\n\n

Spar Gourmet stores strategy<\/strong><\/h2>\n\n\n\n
\"\"<\/a><\/figure>\n\n\n\n

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

The first high-end Spar store, which targets affluent shoppers, is set to open in the fourth quarter of 2025.<\/p>\n\n\n\n

The new Spar Gourmet stores will target South Africans in the 7 to 10 Socio-economic Measures (SEM).<\/p>\n\n\n\n

This group is defined as having high access to resources, infrastructure, and amenities. Simply put, these are wealthy South Africans.<\/p>\n\n\n\n

Oliva said the retailer is looking at sites in high-end residential and urban neighbourhoods to access this market.<\/p>\n\n\n\n

Spar wants to give South Africans a reason to shop by offering high-end products through key strategic partnerships.<\/p>\n\n\n\n

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.<\/p>\n\n\n\n

Through the Private Label Spar Signature Selection range and strategic supplier partners, it will offer differentiated product ranges and bespoke offerings.<\/p>\n\n\n\n

It will offer a fresh arena implementation and a product range and assortment specifically targeting wealthy South Africans.<\/p>\n\n\n\n

Oliva said Spar\u2019s Private Label Spar Signature Selection will play a big role in the new Gourmet stores strategy.<\/p>\n","protected":false},"excerpt":{"rendered":"

Checkers and Spar are rolling out high-end grocery stores, targeting a market segment Woolworths Food dominated for years.<\/p>\n","protected":false},"author":10,"featured_media":817133,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9872],"tags":[5223,7520,9838,22036,949,17353],"class_list":["post-817132","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-checkers","tag-shoprite","tag-spar","tag-spar-gourmet","tag-woolworths","tag-woolworths-food"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/817132","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=817132"}],"version-history":[{"count":1,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/817132\/revisions"}],"predecessor-version":[{"id":817135,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/817132\/revisions\/817135"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/817133"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=817132"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=817132"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=817132"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}