An increasing number of mid- to high-income households continued to trade crowded shopping centres for proximity outlets towards the end of the review period. Initially triggered by movement restrictions in 2020, shopping behaviour has been consolidated by the emergence of new waves of infections driven by the emergence of new variants of COVID-19, leading to a persistent fear factor.
Third party delivery players such as Mr D Food and Uber Eats continued to expand their on-demand services to a number of participating outlets through partnerships with convenience stores in line with greater demand for online food orders. The concept emerged out of necessity during the 35 days of hard lockdown experienced in 2020 because the government restricted trade for non-essential services such as foodservice delivery.
In June 2021, BP officially became the first petroleum company to acquire an alcohol licence in South Africa. Due to a 13-year partnership with Pick ‘n’ Pay, the grant will allow the company to roll out the service to over 170 forecourt retailers, and subsequently, give a competitive edge to Pick ‘n’ Pay Express.
The performance of convenience stores will continue to be driven by the influx of leading modern grocery retailers in neighbourhood areas. The trend will be consolidated by a change in consumers’ behaviour, with operators such as Woolworths also aiming to expand their coverage in mid- and high-income areas in response to the increased demand for convenience during the pandemic.
Shoprite Holdings will likely maintain its convincing leadership of convenience stores over the forecast period, supported by its extended footprint, diversified offers, and brand equity. The retailer is also likely to benefit from adopting a more integrated business model, where new and existing franchisees will leverage the player’s resources and core strengths to boost their performances.
Digitalisation will remain a key growth area for convenience stores due to an increasing number of households embracing the digital economy. The trend will be supported by improved penetration of third party delivery services, with on-demand players such as Mr D Food becoming household names.
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Chained grocery retail outlets selling a wide range of groceries and fitting several of the following characteristics: Extended opening hours Selling area of less than 400 sq metres Located in residential neighbourhoods Handling two or more of the following product categories: audio-visual goods (for sale or rent), foodservice (prepared take-away, made-to-order, and hot foods), newspapers or magazines, cut flowers or pot plants, greetings cards, automotive accessories. Sales data excludes foodservice sales. Example brands include 7-Eleven, Spar. Note: The number of branches required to be termed chained varies from country to country but is usually ten or more. If a multinational is operating in the country, then this is included, even if there are fewer than ten outlets under the brand.See All of Our Definitions
This report originates from Passport, our Convenience Stores research and analysis database.
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