Hypermarkets continued to gain traction across mid- and high-income groups as the channel consolidated its positioning as a one-stop shopping destination during the pandemic. Hypermarkets also benefit from diversified offers, with retailers expanding shelf space for products related to DIY and general merchandise to meet demand from evolving consumer behaviour.
Over the years, chained players have benefited from exclusive long-term lease agreements that allow them to strategically position their hypermarkets in affluent shopping centres. Although beneficial for property landlords because they are guaranteed occupation of shopping spaces, such initiatives have also prevented small and medium operators to expand their stores in affected areas.
Hypermarkets recorded a relatively muted increase in outlet numbers, with retailers maintained a cautious approach to investments towards the end of the review period. As a result, dominant operators Pick ‘n’ Pay and Shoprite focused on refurbishing their stores to improve the consumer experience.
Diversification will continue to support the positive performance predicted for hypermarkets over the forecast period, with players offering services beyond grocery retailing to attract greater footfall to their outlets. For instance, the review period saw Checkers Hyper flagship stores offering dedicated sushi and chocolatier bars, as well as a clothing department under the Little Me range.
The end of exclusive lease agreements will set a new precedent for the South African hypermarket landscape, as it allows new operators to tap into affluent shopping centres in which they were previously not allowed to trade. The shift will be more beneficial to existing operators such as Food Lover’s Market, which focuses on providing affordable fresh food to mid- and high-income groups.
Hypermarkets will continue to expand their digital offer in response to changing consumer behaviour. The trend will be supported by the momentum gained by online services during the review period, with options such as on-demand delivery services meeting the increased demand for convenience.
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Hypermarkets are chained or independent retail outlets with a selling space of over 2,500 square metres and with a focus on selling both grocery and non-grocery merchandise. Hypermarkets are frequently located on out-of-town sites with large parking lots or as the anchor store in a shopping centre. Example brands include Carrefour, E Leclerc, and Walmart Supercenter.See All of Our Definitions
This report originates from Passport, our Hypermarkets research and analysis database.
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