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Cape Town – Until recently South Africa’s two retail giants, Shoprite [JSE:SHP] and Pick n Pay [JSE:PWK], have been engaged in a public battle over who has the biggest market share.
They have, however, now agreed with Nielsen, the research firm that compiles information on the retail sector, not to comment on who has the bigger market stake.
Quinton Ivan, retail analyst of Coronation Asset Managers, says in recent years Pick n Pay has been the dominant retailer in terms of market share.
According to a Pick n Pay spokesperson Pick n Pay’s market stake has been 34% (including its Score shops) and 33.7% (without Score).
However Pick n Pay has been the biggest loser of market share in recent years, Ivan added.
The Shoprite group has gained ground by repositioning its Checkers chain and attracting wealthier clients. Woolworths has increased its food offering significantly.
Pick n Pay has also lost out by only recently centralising its supply chain, while other retailers have sorted this out already.
The Shoprite group’s market share has grown by 1% to 30% in the year to March. According to a Shoprite spokesperson, the group was the only retailer which has increased its market share over the past year.
After Shoprite, Spar is SA’s biggest food retailer (25%) followed by Woolworths (10%). But the big supermarkets represent less than 50% of the total food retail market.
The rest is made up by independent shops, informal trade and Spaza shops.
While Pick n Pay has lost market share, Ivan reckons it can strengthen its position thanks to its new central supply chain starts and as its convenience shops like PnP Express Stores gain traction.
The group can however expect competition from Shoprite and Woolworths, which wants to boost its market share to 15%. And Spar’s franchise model has been very successful, with franchisees who know the market very well.
- Sake24.com
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