South Africa's grocery retailers report reveals flat real growth despite turnover rise

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Trade Intelligence’s bi-annual Corporate Retail Comparative Report (CRCR) offers a detailed analysis of the comparative performance of South Africa’s six major grocery retail companies – Shoprite Holdings, The Spar Group, Pick n Pay Stores, Woolworths Holdings, Clicks Group, and Dis-Chem Pharmacies.

This second edition for 2024 covers the reporting period of the first half of 2024 (HY2024) and is based on financial indicators published by the end of June 2024.

Here are the key performance insights:

Behind turnover growth: very little real growth

While turnover growth appears good, when we strip out the growth attributed to price inflation and new stores, real volume growth is flat. Shoprite, Boxer, and Clicks stand out as the retailers showing real growth in this period, albeit very little.

This flat market is not only putting profit under pressure but also driving store footprint expansion and channel diversification in attempts to find pockets of growth and win market share from competitors.

“Turnover growth for the six corporate retailers is being driven by price inflation and new stores - meaning underlying volume is flat,” says Trade Intelligence economist, Carey Leighton.

“But beneath the surface, there are some interesting dynamics at play.”

Profit under pressure

Gross margins have reached a four-year low, averaging 21.4% across corporate retailers. As a response, investments in IT, supply chain efficiencies, and private brand expansions are becoming critical strategies.

Store footprint expansion

In HY2024 alone, 378 net new stores were added, focusing on higher-margin, smaller formats like forecourts and pharmacies.

This focus on store footprint expansion is in pursuit of pockets of growth and in a bid to win market share from competitors.

Intensified competition for high-income shoppers

Checkers continues to outperform Woolworths Food, with its average turnover per store now 2.6 times higher than Woolworths’. As competition for the high-income shopper intensifies, suppliers need sharper, more tailored business plans to support their retail customers' ambitions in this premium segment.

In a market where every decision counts, the right insights can make the difference between staying afloat and leading the charge.

The Trade Intelligence Corporate Retail Comparative Report provides clear, comprehensive, and comparable stats provide an up-to-date and at-a-glance view of how the major corporate FMCG retailers are doing against each other and the background in which they trade.