Shoprite is strengthening its position in South Africa's grocery sector as consumers increasingly prioritise affordability and value when choosing where to shop.

Households continue to face financial strain from higher fuel costs and elevated interest rates, placing pressure on disposable income. Despite these challenges, Foord Asset Management equity analyst Dhersan Chetty said grocery spending has remained resilient, although shoppers have become far more selective about how they spend.

Consumers are increasingly searching for promotions, switching to lower-priced brands and favouring retailers that consistently offer competitive prices. According to Chetty, these changing shopping habits have widened the gap between retailers gaining market share and those struggling to keep pace.

He said Shoprite, led by its Checkers supermarket chain, together with Boxer, has emerged as one of the biggest beneficiaries of this shift.

"The trend has enabled Shoprite and Boxer to take market share from Pick n Pay and Spar, both of which have faced competitive pressure alongside company-specific challenges," Chetty said.

He added that low prices alone are no longer enough to secure customer loyalty. Retailers also need strong store formats, reliable stock availability, effective use of customer data and loyalty programmes that encourage shoppers to return.

Chetty said Checkers has successfully combined competitive pricing with sophisticated data analytics that allow it to personalise promotions, while its buying scale strengthens its pricing power.

Its Sixty60 on-demand delivery service has also reshaped how many consumers view the brand, elevating Checkers from a traditional supermarket to a convenient grocery solution. For some shoppers, the platform has replaced regular visits to Pick n Pay or quick top-up trips to Spar, with those changing perceptions also influencing where customers choose to shop in-store.

As a result, Pick n Pay and Spar are seeing customer loyalty weaken as more shoppers migrate to retailers offering stronger value and convenience.

Clothing retailers face greater pressure

Chetty said the clothing retail sector faces a more difficult outlook because purchases are largely discretionary and local retailers are competing with low-cost imports from China.

Food retail remains comparatively defensive, although the strongest operators continue to outperform their rivals.

He said Boxer has carved out its own competitive advantage through a discount model focused on a limited product assortment, high sales volumes and low prices.

This strategy appeals to budget-conscious households while also attracting suppliers seeking access to large-scale distribution. Boxer is also expanding from a relatively small market-share base into both high-growth locations and underserved rural and semi-urban markets.

Woolworths, meanwhile, continues to benefit from its reputation for quality, trusted brand and loyal higher-income customer base. However, Chetty said its online grocery service still trails Checkers Sixty60, particularly in terms of delivery reach, creating a growing convenience disadvantage as shopping habits evolve.

Although price-sensitive consumers would typically be expected to drive stronger demand for private-label products, growth has been more modest than anticipated. Private-label penetration is already relatively high in South Africa, while local manufacturing capacity remains constrained.

At the same time, branded food manufacturers are narrowing the price gap by reducing production costs, simplifying packaging and introducing more affordable product ranges.

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