As South Africa’s pet care sector continues to flourish, major retailers like Checkers and Woolworths have aggressively expanded into the space—leaving Pick n Pay in danger of falling behind in what’s become a highly lucrative market.

Retail Rivals Move First

Checkers was the first major player to make a bold move into pet retail, introducing dedicated Petshop Science outlets adjacent to its supermarkets back in 2011. What began as a modest rollout has rapidly scaled; by the close of 2024, the retailer had opened 128 such stores, with expansion continuing at a pace of 30 to 40 new outlets annually—mirroring the group’s successful LiquorShop model.

Woolworths, meanwhile, initially opted to enlarge the pet aisles in its flagship Market stores. Recognizing the segment’s growth potential and high profit margins, the retailer took it a step further by acquiring premium pet chain Absolute Pets in October 2023.

This category is attractive not just because of its growth, but due to its strong margins. Pet retailing often yields high single-digit or even double-digit profit margins—well above Woolworths Food’s average of around 7% and the Shoprite Group’s approximate 6%. Checkers’ pet retail margins are likely even healthier due to the format and positioning of its Petshop Science outlets.

The overall market has also ballooned. In 2022, South Africa’s pet economy was estimated at R7 billion, with recent estimates suggesting it may now be approaching R10 billion. Spending data from the time, provided by Reveal Insights (now Vault22), showed pet owners spent around R1,200 per month on average for their animals’ care—an indication of the category’s broad appeal and depth.

A Crowded Field for Pet Retail

In addition to Woolworths and Checkers, the sector features a host of other established players. Petzone, owned by West Pack Lifestyle—which was rescued from business failure by a private investor last year—is the third-largest chain. Family Pet Centre, backed by Astoria and founded by the team behind Safari & Outdoor, operates in a large-format retail model.

Privately held brands like Pet Heaven, Cat Box, and Pet World also have solid footholds. Even Food Lover’s Market has joined the fray, launching VetsMart pet stores near selected outlets.

Notably Absent: Pick n Pay and Spar

Despite the sector’s growth, Pick n Pay and Spar remain noticeably absent from the pet retail boom.

For Pick n Pay, the reason is straightforward: it’s been focused on survival. In a dramatic restructuring move, it recently carved out its Boxer division and listed it separately to raise capital and stabilize its core grocery operation.

Spar, on the other hand, has been bogged down by self-inflicted wounds, including a troubled SAP rollout that was mostly abandoned, and a poorly executed expansion into Poland that has so far cost the company over R4 billion. New CEO Angelo Swartz has hinted at future interest in adjacent categories like pet care, but Spar’s franchise-like independent retailer model complicates rapid expansion into new segments.

Its relatively new pharmacy business—which primarily serves smaller towns where major pharmacy chains don’t operate—illustrates the challenges Spar faces in rolling out national formats.

Pick n Pay’s Narrow Focus

Pick n Pay has shown no interest in pet retail, instead concentrating strictly on its supermarket, liquor, and clothing divisions. With Boxer now standing alone, Pick n Pay Clothing remains one of the few bright spots in the group. The division saw 7.7% like-for-like sales growth in its last financial year, and standalone store turnover increased 17.7%. It now operates nearly 400 locations, outpacing the market by more than six percentage points, according to the Retail Liaison Committee.

The main challenge lies within Pick n Pay’s traditional supermarket division—a problem so severe that the founding Ackerman family brought back Sean Summers as CEO to lead a turnaround effort.

Summers’ strategy is clear: shrink to grow. The retailer is in the process of closing or converting over 100 underperforming stores. Some locations have already shut their doors, while others are being transitioned into Boxer outlets or franchise-style "Family" stores, depending on the area’s suitability and the availability of franchisees.

So far, these changes are yielding early signs of improvement. Turnover in comparable stores is beginning to recover, even though the group is still losing money. Management expects to nearly halve the previous year’s R2.4 billion net cash outflow this year, and plans to reach cash flow breakeven next year. A trading profit is targeted for the 2027 financial year—potentially marking the first profitable year for the core Pick n Pay business in four years.

A Missed Opportunity?

The downside of this intense internal focus is that it leaves little bandwidth for new ventures, such as pet retail. Years ago, Pick n Pay outsourced its in-store pharmacies to Clicks in order to reduce operational complexity—a move that reflected its preference for simplicity in execution.

With that in mind, its current commitment to streamlining operations makes sense. But in doing so, is Pick n Pay forfeiting a major opportunity in an adjacent, fast-growing market?

Worse still, if the pet category continues to expand at this pace, will Pick n Pay find itself paying a steep price to buy back into a space it ignored for too long?

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