As South Africa slides into recession, the No1 supermarket group, Shoprite, is adopting an unlikely strategy: it is pushing upmarket. While the lower-income families that have long been its core customers cut back, the spending of the wealthier class remains undented by the downturn.
In a bid to retain its leading industry position, the discount retailer’s new boss is driving hard into the upmarket, higher-margin niche dominated by rival Woolworths.
The stage is set for a turf war to win the hearts, minds and wallets of South Africa’s richest 2 million households.
Shoprite CEO Pieter Engelbrecht said affluent areas and customers were where he saw growth.
“A lot of those [wealthier] customers, 2million of them, actually frequent our stores already, but not exclusively,” he said. “Our job is to get a better share of their wallets when they are in our stores.”
Shoprite is doubling its offering of the kind of high-end convenience foods that Woolworths has built its reputation on – from gourmet lamb shanks and oxtail stew to teriyaki-and-ginger basted pork ribs. Its range will reach around 500 products by the end of this year, Engelbrecht said.