By: Trade Intelligence

New data from Trade Intelligence reveals key shifts in South Africa’s FMCG retail landscape, with Discounter and E-commerce formats outperforming other channels in 2024.

Despite easing inflation, South African shoppers remain under economic pressure, leading to changing missions, increased cross-channel behaviour, and format diversification among major retailers.

According to Trade Intelligence’s latest modelling, outlined in its newly released SA FMCG Market Size and Channel Report, total FMCG retail sales grew +6.9% in 2024, with performance supported by footprint expansion in the corporate retail sector and a strong final quarter, buoyed by interest rate cuts and early withdrawals under the country’s two-pot retirement system.

“Retailers are pursuing growth by diversifying format strategies and moving into new spaces,” says Carey Leighton, Economist at Trade Intelligence. “We’re seeing a continued push into the Discounter and  E-commerce channels, all in an effort to meet shoppers where they are.”

Shopper Strain Persists Despite Lower Inflation

While the official food inflation rate dropped to +4.5% in 2024 — down from +10.8% in 2023 — household pressure remains high. Data from the Pietermaritzburg Economic Justice & Dignity Group (PMBEJD) show that the cost of a basic food basket has risen +26% since 2021, leaving many South Africans with less disposable income and prompting shifts in how and where they shop.  Retailers and suppliers are responding by intensifying promotions, refining pack sizes, and rethinking pricing architecture across channels.

Format Evolution: Focus on Discounters and E-Commerce

Discounters (i.e. players such as Boxer, Usave and SaveMor) recorded high year-on-year growth at +13.9%. While still relatively small in total market share, discount formats are gaining momentum across income groups, led by aggressive expansion.  At the same time, FMCG E-commerce remains the fastest-growing channel, albeit off a small base. Trade Intelligence estimates online FMCG growth at +40% year-on-year, driven largely by the expansion of on-demand platforms like Checkers Sixty60, PnP asap!, SPAR2U and Woolies Dash.

Supermarkets Hold Dominance, But Pressure is Mounting

Supermarkets continue to be the largest channel in South African FMCG, with over half of spend flowing through this format. However, growth within the supermarket channel is uneven. According to Trade Intelligence’s data, Premium Supermarkets outperformed Value Supermarkets in 2024, reflecting the pressure felt by value-seeking shoppers who are also shopping at Discounters and Informal Retail (spaza shops, etc.).

Informal Retail Still Holds Ground

Despite rapid corporate expansion, the informal retail sector remains a significant player in South Africa’s FMCG environment. Trade Intelligence reports +5.2% growth in the informal space in 2024, with proximity and convenience continuing to drive shopper loyalty.  Spaza shops and township outlets have retained relevance, particularly for small, frequent shopping missions and cash-based shoppers. However, the sector faces rising regulatory and infrastructure challenges, as well as increasing competition from the corporates, which may affect growth in the medium term.

Implications for Retail Strategy

The picture is one of increasing channel blurring, with formats evolving rapidly in response to both shopper needs and retailer ambitions. Format strategy, route-to-market planning and shopper engagement tactics are being re-evaluated across the board.  These dynamics are unpacked in greater depth in Trade Intelligence’s  newly released SA FMCG Market Size and Channel Report, which provides sector, channel and sub-channel sizing as well as future forecasts.  “South Africa’s FMCG market, sectors, channels, and sub-channels are as complex and dynamic as the shoppers in them,” says Leighton. “Understanding is vital for building retail channel and format strategies.”

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