By Nqobile Dludla
JOHANNESBURG (Reuters) -Shoprite Holdings will expand its on-demand grocery delivery service to its namesake discount stores, stepping up a turf war for South Africa’s low-income shoppers, it said on Tuesday after reporting a 9.9% rise in half-year earnings.
Facing fierce competition from rivals Pick n Pay and Woolworths, the country’s biggest supermarket group is expanding its market leading Sixty60 online delivery to Shoprite customers after entering the quick commerce market in 2019 via its upmarket Checkers chains.
Following a successful pilot in Gauteng and the Western Cape provinces, Sixty60 is set to launch in 19 Shoprite stores across eight provinces, the company said.
“For a couple of months we had three stores as a pilot to test the water to see if there is demand and the answer is there is a demand,” Pieter Engelbrecht, the Group CEO told Reuters, adding that the rollout won’t be as big as that of Checkers Sixty60.
Checkers Sixty60 has expanded the store base from which it services Checkers customers to 601 stores.
The group is also planning to add more than 10,000 general merchandise products to its re-vamped Checkers Sixty60 app, which now competes with big e-commerce players such as Takealot and Amazon.
Shoprite, with more than 3,400 stores including OK Franchise across 10 African countries, reported headline earnings per share from continuing operations of 662.3 cents in the 26 weeks ended December 29.
Group sales from continuing operations grew by 9.6% to 128.6 billion rand ($6.91 billion), as the retailer’s core business, Supermarkets South Africa, achieved sales growth of 10.4%, with like-for-like sales growth of 6.1%.
The sales growth in Supermarkets South Africa was supported by strong volume growth as a result of across-the-board gains in customer visits, up 4.1% and average basket spend increase of 6.1%, Engelbrecht said in a statement.
For January, sales growth in Supermarkets South Africa was ahead of that reported for the first half, Engelbrecht told investors.
($1 = 18.6185 rand)
(Reporting by Nqobile Dludla; Editing by Muralikumar Anantharaman and Rashmi Aich)
