Discounters in South Africa

PROSPECTS

Struggling economy supports rise of discounters

With South Africa’s economy struggling many consumers remain price conscious and so look for the most affordable options when grocery shopping. This helped support the rapid rise of the discounters channel in the country, with retailers targeting underserved populations and low-income households in particular.

Discounters offer additional services to the community

While low prices are the key attraction of discounters outlets, these stores also offer a range of other services to help support the local community and attract additional business. For example, U-Save and Boxer Punch stores offer customers the ability to access a range of additional services including cash withdrawals, bill payments, mobile top-ups and the ability to collect government social grants in store.

Retailers invest in the environment

Retailers are increasingly focusing on their environmental footprint and this has also been true in the discounters channel with both players (Shoprite and Pick ‘n’ Pay) taking steps to improve their operations. For example, Shoprite has a zero waste-to-landfill approach to all of its stores, including its U-Save chain.

COMPETITIVE LANDSCAPE

Shoprite retains dominance

Shoprite Holdings Ltd continued to account for most sales within the discounters channel in 2018 thanks to the popularity and reach of its U-Save chain. Despite the tough economic environment the company added a significant number of new stores to its network in 2018, with it looking to benefit from the growing demand for affordable products.

Shoprite Money launched

Shoprite also launched its Shoprite Money mobile wallet in 2018, which consumers can use to pay for groceries at the company’s stores, which includes its U-Save chain. Customers can also send money and pay for electricity and mobile top-ups through the app.

Pick ‘n’ Pay provides the competition

In a highly consolidated channel, Pick ‘n’ Pay was the only other play present in discounters in 2018 with its Boxer Punch chain. Following the success of U-Save the company has looked to target lower-income areas with it offering a range of basic range of affordable groceries and household items including prepacked frozen and fresh meat and a limited range of baked goods.

Files are delivered directly into your account within a few minutes of purchase.