Shoprite Holdings, the largest supermarket group in Africa, and partly owned by South African billionaire Christo Wiese, is diversifying its business by expanding into specialist clothing, baby, outdoor, and pet stores in South Africa.
In line with its expansion plans, the group is set to open its first clothing stores in Cape Town later this month, with a “very niche proposition.” This will be followed by 10 additional clothing stores across the country.
The move follows a remarkable 19.9-percent increase in profit, which has encouraged Shoprite to broaden its offerings and add to its floor space in South Africa, where it generates more than 80 percent of its sales.
During an interview on Tuesday, Pieter Engelbrecht, CEO of Shoprite, spoke about the company’s latest expansion plans, which align with its strategic goals. He observed that customers tend to shop differently for certain categories and prefer to shop at specialized stores, creating a gap in the market that the company is eager to fill.
“We have removed most of the clothing from our hypermarkets because I’m of the opinion that people have, what I call premiumized, the purchases of clothing,” he said. “They’re not comfortable, or don’t enjoy, buying clothing with their food and would prefer to do it in a specialist store.”
As part of its expansion plan, Shoprite intends to open 217 new outlets in South Africa over the next six months, with around 20 stores dedicated to specialized categories, according to Engelbrecht. Furthermore, each new segment will be available online, providing customers with a convenient and accessible shopping experience.
Shoprite posts $177 million in profit in H1 2023
Shoprite Holdings Limited is Africa’s largest retailer and the foremost food retailer in South Africa, with a presence in over 2,900 locations on the continent and a workforce of more than 140,000 employees.
Wiese, who played a significant role in the company’s growth, owns an 11.63-percent stake in the company and 305.6 million non-convertible, non-participating, no-par value deferred shares, which account for 32.2 percent of Shoprite’s voting rights.
At the end of the first six months of its 2023 fiscal year, Shoprite reported an impressive 19.9-percent increase in its profit from R2.72 billion ($148.3 million) in 2022 to R3.26 billion ($177.7 million), driven by a strong combination of increased customer traffic, volume growth, and higher average basket spend.